IMF considering $200 million emergency aid for cyclone-hit Sri Lanka

The International Monetary Fund (IMF) said on Friday that it is considering an emergency request from Sri Lanka for about $200 million in rapid financial assistance, as the island nation struggles to recover from the sweeping devastation left by Cyclone Ditwah.

Evan Papageorgiou, the IMF’s mission chief for Sri Lanka, said the cyclone had caused “devastating impact and widespread destruction,” and expressed condolences to those affected. The storm, one of the most destructive to hit Sri Lanka in recent years, has battered infrastructure, displaced thousands and intensified concerns over the country’s fragile economic recovery.

Sri Lanka has asked the Fund for support under its Rapid Financing Instrument, seeking SDR 150.5 million- about 26 percent of its quota, or roughly $200 million. 

The request will need approval from the IMF’s Executive Board, which is expected to assess the scale of the disaster’s economic fallout and the government’s broader fiscal position.

“The IMF remains closely engaged with the Sri Lankan authorities during this challenging period,” Papageorgiou said in a statement.

“We are committed to supporting the country as it undertakes urgent efforts to recover, rebuild and promote resilience for the future.”

The appeal comes as Sri Lanka continues to navigate a prolonged economic crisis marked by depleted foreign reserves, high inflation and a heavy debt burden. The cyclone’s destruction has added new pressure on the government, which is racing to restore essential services and provide relief to hard-hit communities.

International assistance - including from multilateral lenders like the IMF- is likely to play a critical role in the country’s immediate recovery and longer-term rebuilding efforts.

Source: UNI 

--Agencies