No fixed timeline for disbursement of second tranche of EFF to Sri Lanka - IMF

No fixed timeline for disbursement of second tranche of EFF to Sri Lanka - IMF

September 27, 2023   05:18 pm

The International Monetary Fund’s (IMF) Senior Mission Chief for Sri Lanka, Peter Breuer stated that there is no fixed timeline for the disbursement of the second tranche of the IMF’s Extended Fund Facility (EFF) to Sri Lanka and that two important things are needed to be satisfied for the matter to be fulfilled.

“There’s no fixed timeline. As I mentioned, we need two important things to be satisfied. We need to reach an agreement on a set of policies and reforms that will allow us to go forward with the understanding that the objectives of the programme can be reached”, he told reporters in Colombo on Wednesday (27), after a two-week visit to the country.

Mr. Breuer, who mentioned that it has been discovered that there is a certain revenue shortfall in one area on which they are looking to try and find ways to address that shortfall and compensate for it, also stated that working in the direction of having an agreement on these policies is one of the most important prerequisites.

 “The other one is in the area of debt is stable towards debt sustainability reached in agreements with creditors that will help restore debt sustainability in Sri Lanka”, Mr. Breuer emphasized, adding that “when these two conditions are met, we can go forward.”

Furthermore, the IMF Mission Chief also highlighted that there are also few administrative proceedings which will affect the timeline for the disbursement of the EFF’s second tranche.

“It takes us some time to write the reports that actually access the performance for the first review. The report goes through various steps before it is considered by our executive board which will make the final decision on this and that finally publish that report and shared with the public”, he expressed.

In response to a question raised by a journalist on whether the IMF’s EFF agreement with Sri Lanka could be renegotiated, Mr. Breuer asserted that renegotiating the relevant agreement is theoretically possible but it is a big undertaking.

“It’s of course a big undertaking and indeed we would want to be sure that the objectives of the programme can still be achieved.”

“There have been little changes to the programme where the same objectives can be achieved in different ways.  It is indeed this is what about we do on an ongoing basis”, he mentioned.

“For example during this review, making sure that the policies we agreed at the beginning are still the appropriate policies or do adjustments are needed to be made as we go long, Breuer said, adding that “in a way, the programmes are dynamic and do this all the time anyway”.

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