Sri Lanka receives long-awaited IMF bailout
The IMF approved a $3 billion funding package on Monday after months of back-and-forth with Sri Lanka’s government during which a cloud of economic chaos threatened to engulf the country. The agreement could unlock up to $7 billion in additional lending from multilateral institutions such as the World Bank and the Asian Development Bank, Reuters reports.
The IMF said it would immediately disburse $333 million from the bailout package. Sri Lanka is looking to restructure $84 billion in debt after defaulting last May, Al Jazeera reports.
Years of financial mismanagement came to a head in Sri Lanka last year, as inflationary pressure prompted by Russia’s attack on Ukraine compounded the effects of dwindling foreign reserves and the damage caused by the pandemic. President Ranil Wickremesinghe brokered an agreement with the IMF last September but that agreement was stalled until this week as Sri Lanka labored to meet the fund’s conditions, including winning approval from bilateral lenders India and China.
