Issues of creditor equitability, transparency important: India on Lanka IMF loan
IMF said it had reached a “staff-level agreement” with Sri Lankan authorities to support Colombo’s economic policies with a four-year arrangement under the Extended Fund Facility (EFF) of about $2.9 billion
India on Thursday highlighted the need for structural reforms, creditor equitability and transparency in Sri Lanka following the International Monetary Fund’s (IMF) announcement of a bailout package for the island nation.
IMF said it had reached a “staff-level agreement” with Sri Lankan authorities to support Colombo’s economic policies with a four-year arrangement under the Extended Fund Facility (EFF) of about $2.9 billion. The arrangement was concluded protracted negotiations amid Sri Lanka’s worst economic crisis since independence.
“This is an evolving situation,” external affairs ministry spokesperson Arindam Bagchi told a weekly news briefing, referring to the staff-level agreement. The objectives, he said, include restoration of macro-economic stability, debt sustainability, protecting the vulnerable and stepping up structural reforms.
“India has been advocating for assistance to Sri Lanka, but let’s see how it progresses. The issues of creditor equitability and transparency are important,” he said.
“We also understand that this process will need to be taken forward for subsequent approvals within the IMF itself,” he added.
Since the beginning of the year, India has extended to Sri Lanka economic assistance worth $3.8 billion, including lines of credit for emergency purchases of food, medicines and fuel, a currency swap and deferral of loan repayments.
Sri Lankan high commissioner Milinda Moragoda said in an interview that Colombo sees New Delhi as a “logical partner” for his country’s efforts to overcome the economic crisis, including acquiring bridging finance and investments in key sectors such as tourism.
“We are looking to see what is possible with India. There are different ways of approaching it – not necessarily loans alone, but investments. Maybe we look at even rupee trade,” Moragoda said.