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Sri Lanka's financial crisis: India, US, Japan secure USD 2.286 bn IMF bailout Sri Lanka
Representational image by Mariana Proença on Unsplash

Sri Lanka's financial crisis: India, US, Japan secure USD 2.286 bn IMF bailout

India Blooms News Service | @indiablooms | 28 Mar 2023, 12:07 am

Colombo: After a protracted battle by India, the United States and Japan to get China to agree to restructure its massive loan of USD 7 bn to Sri Lanka,  the International Monetary Fund (IMF) has finally approved  a USD 2.286 billion bailout for financially-hit Sri Lanka.

The Sri Lankan government under President Ranil Wickremesinghe endorsed on Saturday that Sri Lanka is no longer deemed bankrupt by the world, Trueceylon reported as quoted by ANI.

As foreign exchange reserves dwindled, shortages of essential commodities emerged resulting in mass protests in early 2022.

Reserves eventually ran out, compelling the country to declare a unilateral moratorium on selected external debt service payments until the debt was restructured and commenced an IMF-supported economic reform programme to recover from the unprecedented crisis, Trueceylon reported as quoted by ANI.

In the meantime, Gotabaya was accused of poor leadership, defaulted the international payments, and further harming the nation’s economy by outlawing chemical fertilizers and continuing to print money, all of which were aided at the time by the then-Central Bank of Sri Lanka (CBSL) Governor Nivard Cabraal, Trueceylon reported.

The IMF Board recently said they have approved a 48-month extended arrangement under the Extended Fund Facility (EFF) of Special Drawing Rights (SDR) to support Sri Lanka’s economic policies and reforms.