The International Monetary Fund (IMF) has informed Sri Lanka to expedite the finalisation of bilateral agreements with its remaining official and commercial creditors, as the island nation nears the conclusion of its debt restructuring process.
In a statement issued at the end of the IMF mission to Colombo, Mission Chief Evan Papageorgiou emphasised that accelerating these agreements is essential to restoring debt sustainability and rebuilding investor confidence.
“Progress toward operationalising the Public Debt Management Office should also be accelerated,” Papageorgiou noted, while highlighting the importance of maintaining prudent monetary policy.
He further stressed that the Central Bank’s independence must be preserved, especially by avoiding any monetary financing of the budget. Key priorities remain continued accumulation of foreign reserves and ensuring exchange rate flexibility.
To support long-term private sector development and credit growth, the IMF urged the government to address structural financial issues, including resolving non-performing loans, strengthening state bank governance, and improving insolvency and resolution frameworks.
“A steadfast implementation of governance reforms outlined in the government’s action plan is critical to addressing corruption vulnerabilities,” Papageorgiou added.
He also called for structural reforms to liberalise trade and investment, enhance competitiveness, increase female labour force participation, and address climate change.
The IMF noted that progress under the current Extended Fund Facility (EFF) will be evaluated during the upcoming Fifth Review, with the timing of the review to be decided in consultation with the government.
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