Foreign

 SRI Lanka expects final approval from the International Monetary Fund for a 2.9 billion dollars loan in the third or fourth week of March.

The president made the announcement on Tuesday, saying that new support from China meant that all funding requirements had been met.

The country of 22 million people is struggling with its worst economic crisis since independence from Britain in 1948.

President Ranil Wickremesinghe told parliament that there were signs that the economy was improving but there was still insufficient foreign currency for imports, making the IMF deal crucial so that other creditors could also start releasing funds.

“Sri Lanka has completed all prior actions that were required by the IMF,” Wickremesinghe said.

He said that the Export-Import Bank of China had sent “a new letter” on Monday, and he and the country’s central bank governor had sent a letter of intent to the IMF.

“As a result of this step and financing assurances from India and the Paris Club, we expect approval for the programme either in the third or fourth week of March,” he said.

The country’s international debt and currency roared higher in the news, with bonds adding nearly three cents in the dollar while the rupee jumped nearly eight per cent to a 10-month high.

It was not clear what new support China, the world’s biggest sovereign creditor, extended to Sri Lanka on Monday.

In January, the Export-Import Bank of China offered Sri Lanka a two-year moratorium on its debt and said it would support its efforts to secure the IMF loan, which a Sri Lankan source said, at the time, was not enough to meet IMF conditions.

According to IMF data, China and India are Sri Lanka’s biggest lenders.

By end of 2020, Sri Lanka owed the Export-Import Bank of China 2.83 billion dollars or 3.5 per cent of the island’s external debt.(NAN)

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Tags: IMF Sri Lanka