Imf Approves Bailout Package

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Imf Approves Bailout Package

Imf Approves $2.9 Billion Bailout Package For Sri Lanka

According to media reports, a bailout package worth $2.9 billion for Sri Lanka has been approved by the International Monetary Fund (IMF).

However, the IMF has warned that the Sri Lankan economy remains exposed to risks. That's why the global lender has also urged the country to take more action to get out of the debt burden.

Imf Releases $336 Million For Sri Lanka

Initially, IMF will release $336 million, which will make the total fund to $1 billion. Sri Lanka approached the IMF after approaching default and is now trying to stage an economic recovery.

IMF also asked the country to finalize the MoU with the OCC, which comprises lenders like India and Japan. Similarly, the country is also expected to swiftly complete the agreements with China-based banks.

According to officials, they will be able to reach a consensus with the creditors and the banks. However, they didn't commit to any timeline for what could happen. If we look at the IMF, the lender wants the whole process to be completed swiftly.

Sri Lanka experienced one of its worst financial crises in 2022 after facing a shortage of USD. At that time, the inflation rate also reached 70%, one of the highest in the recent past. Meanwhile, the country's GDP growth also plunged to -7.3% contraction.

In March 2024, the IMF bailout package was secured by Sri Lanka, which helped the country to stabilize its economic conditions. In the last few months, Sri Lankan Rupee has gained 7% against the USD while the inflation for May was around 0.9%.

Although the IMF has approved yet another bailout package for the country, not everythng is looking great. The country is trying to pay back its debt by taking out more debt. In a sense, we can say that the country is now trapped in a circle with no way out.

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