IMF Completes Third Review of Sri Lanka’s Loan Program, Approves $334 Million Disbursement

COLOMBO – The International Monetary Fund (IMF) has completed the third review of Sri Lanka’s 48-month Extended Fund Facility (EFF) program, enabling the disbursement of Special Drawing Rights (SDR) 254 million (approximately US$334 million) to support the country’s economic reforms.

With this latest disbursement, Sri Lanka has received a total of SDR 1.02 billion (around US$1.34 billion) under the program, which was originally approved in March 2023 with a total financing package of SDR 2.286 billion (approximately US$3 billion).

The IMF noted that Sri Lanka has demonstrated strong performance under the program, with all quantitative targets for December 2024 being met, except for the indicative target on social spending. Additionally, most structural benchmarks due by January 2025 were either achieved or implemented with some delays. The recent completion of the bond exchange was highlighted as a key milestone toward restoring debt sustainability.

The IMF acknowledged that Sri Lanka’s economic recovery is gaining momentum due to ongoing reform efforts. However, it warned that the economy remains vulnerable and stressed the importance of sustaining the reform agenda to ensure long-term stability and debt sustainability.

The EFF program is designed to help Sri Lanka restore macroeconomic stability, rebuild external reserves, and implement growth-oriented structural reforms while ensuring the protection of vulnerable communities.

Following the Executive Board’s review, IMF Deputy Managing Director Kenji Okamura emphasized the need for continued commitment to economic reforms to maintain progress and achieve lasting recovery.