Sri Lanka gains IMF’s provisional agreement for $2.9 bln loan

Sri Lanka has reached a preliminary agreement with the International Monetary Fund (IMF) for a loan of about $2.9 billion, the global lender said on Thursday, as the country seeks a way out its worst economic crisis in decades.

The agreement, which Reuters first reported on Wednesday, is subject to approval by IMF management and its executive board, and is contingent on Sri Lankan authorities following through with previously agreed measures.

“This staff-level agreement is only the beginning of a long road ahead for Sri Lanka to emerge from the crisis,” senior IMF official Peter Breuer told reporters in Colombo.

“The authorities have already begun the reform process and it will be important to continue on this path with determination.”

IMF conditions for the loan also include receiving financing assurances from Sri Lanka’s official creditors and efforts by the country to reach an agreement with private creditors.

Its programme, spread over four years, will aim to boost government revenue, encourage fiscal consolidation, introduce new pricing for fuel and electricity, hike social spending, bolster central bank autonomy and rebuild depleted foreign reserves.

The country’s reserves stood at $1.82 billion as of July, according to central bank data.

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