The Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe says that Sri Lanka has made “good progress” in the negotiations with the International Monetary Fund (IMF), which are aimed at clinching a bailout package.

“I can announce that we have made good progress in the negotiations with the IMF. Hopefully, we will be able to reach the first milestone, a staff-level agreement with the IMF soon,” the central bank chief told reporters in Colombo. “Once we reach that agreement with the IMF, it means that we have a credible program in our hands.”

He noted that the agreement with the IMF would be followed by important policy reforms that would put Sri Lanka back on track to return to stability. The interim budget that was presented to the parliament provides the basis for this, the central bank governor remarked.

He congratulated the President and the Treasury Secretary for presenting a budget which contains very bold steps that are not quite popular in the political sphere.

Speaking further on riding out the crisis situation in the country, Dr. Weerasinghe said the people have to go through a very painful process to that end. “We experienced a lot more in the last couple of months but we are gradually seeing some improvements,” he continued, adding that Sri Lanka has made some progress in comparison to where it was and where it is now.

Delivering the interim budget speech for 2022 earlier today, President Ranil Wickremesinghe had also said that talks with the IMF had reached the “final stage”.

Negotiations with the IMF, which has a team of officials visiting Sri Lanka, had made headway, said Wickremesinghe.

“Negotiations with the International Monetary Fund (IMF) have successfully reached its final stage. Discussions on debt restructuring will be held with the main countries that provide loan assistance to our country,” the President had said.

Unveiling the measures in parliament, President Ranil Wickremesinghe added that the government would aim to rein in inflation and introduce legislation to bolster central bank independence.

Sri Lankan officials hope the budget will be followed by a preliminary, staff-level agreement with the IMF for a loan package worth between $2 billion and $3 billion.

The revised budget estimates project revenues of 2 trillion Sri Lankan rupees ($5.6 billion) in 2022, down from an initial figure of 2.23 trillion.

Total expenditure is set to rise to 4.4 trillion rupees, exceeding the earlier estimate of 3.9 trillion.

--With Agencies Inputs