The International Monetary Fund yesterday, announced that it approved the USD 1.5 billion Extended Arrangement with Sri Lanka to support the island nation's economic reform agenda.
The Executive Board of the International Monetary Fund approved the 36-month extended arrangement with Sri Lanka under the Extended Fund Facility.
It also added that the fund will be in 6 instalments, and the first instalment will be 168.1 million dollars.
The IMF arrangement aims to meet balance of payments needs arising from a deteriorating external environment and pressures that may persist until macroeconomic policies can be adjusted.
Deputy Managing Director of the IMF Min Zhu said that despite positive growth momentum, Sri Lanka's economy is beginning to show signs of strain from an increasingly difficult external environment and challenging policy adjustments.
The new government's economic agenda, supported by the Extended Fund Facility, provides an important opportunity to re-set macroeconomic policies, address key vulnerabilities, boost reserves, and support stability and resilience.
A return to fiscal consolidation, targeting a reduction in the overall fiscal deficit to 3.5 percent of GDP by 2020, is the linchpin of the reform program.