Sri Lanka’s President, Ranil Wickremesinghe, announced on Monday, March 21st that the country would begin lifting import restrictions in stages, starting with essential goods, after the International Monetary Fund (IMF) approved a long-awaited extended fund facility (EFF). This comes as Sri Lanka’s currency has collapsed from 200 to 360 to the US dollar, and the country was struggling with pre-existing vulnerabilities and policy missteps, which were further aggravated by a series of external shocks.
IMF Approves 48 Month Program for Sri Lanka
On Monday evening, the IMF announced that it had approved a 48-month program for Sri Lanka worth $3 billion. According to the IMF statement, this program aims to restore Sri Lanka’s macroeconomic stability and debt sustainability, mitigate the economic impact on the poor and vulnerable, safeguard financial sector stability, and strengthen governance and growth potential. This approval signals the IMF’s acknowledgment of Sri Lanka’s capacity to restructure its outstanding debt.
Gradual Lifting of Import Restrictions
With the IMF’s approval of the extended fund facility, Sri Lanka’s president has announced a gradual lifting of import restrictions. Starting with essential goods, medicines, and goods needed for industries like tourism, the lifting of import restrictions will occur as Sri Lanka’s foreign exchange situation improves. The president made this announcement in a video statement issued on March 21st, only hours after the IMF’s executive board approved the $2.9 billion EFF.
Path Ahead Must be Forged in Accordance with IMF Program
Sri Lanka’s president also stated that the path ahead for the country must be forged in accordance with the IMF program. He noted that the deal with the global lender would be tabled in parliament on Wednesday, and he would make a full statement on this in parliament. This announcement comes as a relief to many in the country, as Sri Lanka had been facing significant challenges in the lead up to the crisis.
In conclusion, Sri Lanka’s president has announced that the country will begin lifting import restrictions in stages, starting with essential goods, after the IMF approved a long-awaited extended fund facility. With the IMF’s approval of a $3 billion program for Sri Lanka, the country can begin to restore macroeconomic stability and debt sustainability, safeguard financial sector stability, and strengthen governance and growth potential. The lifting of import restrictions will occur as Sri Lanka’s foreign exchange situation improves, and the path ahead for the country must be forged in accordance with the IMF program. This announcement comes as a much-needed relief to Sri Lanka, which had been facing significant challenges in the lead up to the crisis.
