Sri Lanka President Ranil Wickremesinghe told parliament on Wednesday (March 22) that the country has received USD 330 million as the first tranche of International Monetary Fund (IMF) bailout. He said that the bailout programme will lead to better “fiscal discipline” and “improved governance”.

On Tuesday, the IMF approved USD 3 billion bailout programme for Sri Lanka which is still not out of an unprecedented economic crisis. IMF’s move was hailed by Sri Lanka as a “historic milestone”.

The IMF’s Executive Board approved on Monday a 48-month extended arrangement under its Extended Fund Facility (EFF) with an amount of SDR 2.286 billion (about USD 3 billion).

Special Drawing Rights (SDR) are supplementary foreign exchange reserve assets defined and maintained by the IMF.

The EFF-supported programme aims to restore Sri Lanka’s macroeconomic stability and debt sustainability, mitigate the economic impact on the poor and vulnerable, safeguard financial sector stability, and strengthen governance and growth potential, the IMF said.

This programme will allow Sri Lanka to access financing of up to USD 7 billion from the IMF, International Financial Institutions (IFIs) and multilateral organisations, a statement said.

Sri Lanka in April last year declared its first-ever debt default in its history as the worst economic crisis since independence from Britain in 1948 triggered by forex shortages sparked public protests.

Months-long street protests led to the ouster of the then-president Gotabaya Rajapaksa in mid-July.
Rajapaksa had started the IMF negotiations after refusing to tap the global lender for support.

(With inputs from agencies)

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