Sri Lanka’s government has reportedly decided to ask for World Bank’s assistance next month along with a detailed discussion on the International Monetary Fund (IMF) rescue plan to counter the severe economic crisis the country is going through, reported an international media agency.
As a consequence of the enormous 70% drop in foreign exchange reserves in January 2020, the South Asian country is struggling to pay for essential imports, including food and fuel. The situation has led to the growing unrest and even military deployments at gasoline stations.
To seek a way out of the crisis, Finance Minister Basil Rajapaksa will be heading to Washington DC next month to hold meetings with the IMF and also officials from the World Bank, two sources with direct knowledge of the plans told the press.
“What we need is budgetary support,” said one of the sources, referring to the monetary aid that the Sri Lankan government will ask the World Bank for.
The source, however, was unable to provide information about the exact amount of assistance that Sri Lanka could seek from the World Bank.
IMF considering the Sri Lankan President’s Request:
International Monetary Fund (IMF) on Friday confirmed it was considering the Sri Lankan President’s surprise request made on Wednesday to discuss a rescue plan.
“We will discuss with the authorities how best we can assist Sri Lanka going forward,” stated IMF spokesman Gerry Rice, while talking to the reporters in the capital.
$1bn credit line secured from India:
Sri Lanka, on Thursday, secured a $1bn credit line from India to buy urgently needed food and medicine, according to officials familiar with the matter.
The two countries have formally entered into the credit agreement during finance minister Basil Rajapaksa’s visit to New Delhi, treasury secretary Sajith Attygalle told the press.
“India stands with Sri Lanka,” Indian foreign minister S Jaishankar had said on Twitter, earlier this month. “US$1 billion credit line signed for supply of essential commodities.”