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Sri Lanka's finance ministry and India's foreign ministry did not immediately respond to requests for comment. He said China, Sri Lanka's biggest lender, extended support for the IMF programme on Monday, clearing the way for the loan. The IMF said its board would meet on March 20 to review a preliminary staff-level agreement first signed with Sri Lanka in September. It said Sri Lanka had secured financing assurances from all major bilateral creditors. China and India are Sri Lanka's biggest lenders and both seek influence on the island located on a busy shipping route on the Indian Ocean.

☆ With China's support, Sri Lanka expects nod for $2.9 bln IMF deal
▼ + stars: | 2023-03-07 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +4 min

"Sri Lanka has completed all prior actions that were required by the IMF," Wickremesinghe said. It was not clear what new support China, the world's biggest sovereign creditor, extended to Sri Lanka on Monday. By end-2020, Sri Lanka owed the China EximBank $2.83 billion or 3.5% of the island's external debt, according to IMF data. Sri Lanka needs to repay about $6 billion on average each year until 2029 and will have to keep engaging with the IMF, Wickremesinghe added. Sri Lanka has been waiting for about 187 days to finalise a bailout after reaching a staff-level deal with the IMF.

☆ Sri Lanka says 'positive news' coming from IMF on $2.9 bln package
▼ + stars: | 2023-03-07 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +2 min

COLOMBO, March 7 (Reuters) - Sri Lanka is on the verge of getting "very positive news" from the International Monetary Fund on a $2.9 billion programme, a government minister said on Tuesday, while a senior source said it had also won debt restructuring support from China. The island nation of 22 million is struggling with its worst economic crisis in more than seven decades. "Sri Lanka is on the verge of getting very positive news from the IMF," the junior finance minister, Shehan Semasinghe, told parliament. "The IMF programme is essential for us and Sri Lanka has worked very hard since last September to secure it." A senior Sri Lankan government official said the Export-Import Bank of China had written to the IMF supporting Sri Lanka's debt restructuring programme, which is critical to securing final approval for the loan.

☆ Sri Lanka's rate hike shows commitment to rapid disinflation - IMF
▼ + stars: | 2023-03-04 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +2 min

COLOMBO, March 4 (Reuters) - Sri Lanka's decision to raise interest rates shows the crisis-hit country's commitment to reducing inflation quickly towards single-digit levels, the International Monetary Fund (IMF) said on Saturday. In a surprise move, the South Asia nation's central bank raised rates by 100 basis points on Friday to battle inflation, which is at 50.6%. The central bank raised its standing deposit facility rate to 15.50% and its standing lending facility rate to 16.50%, and said it would relax its currency band to move towards a market-determined exchange rate as it seeks to secure the bailout. The bank raised rates by 950 bps in the first half of last year to contain the country's financial crisis. Sri Lanka is pushing for finalisation of a four-year Extended Fund Facility and is expecting IMF board level approval this month, its central bank chief said on Friday.

The bank raised its standing deposit facility rate and standing lending facility rate by 100 basis points each to 15.50% and 16.50%, respectively, it said in a statement. The country is awaiting approval of a $2.9 billion IMF bailout package as it endures its worst financial crisis since independence from Britain in 1948. The central bank raised rates by a record 950 basis points last year to tame inflation and then kept them steady until Friday's 100 basis point increase. "There have been some differences between the CBSL and IMF staff on the inflation outlook," the Central Bank of Sri Lanka (CBSL) said in its statement. But depends on whether the market reads this as positive for getting IMF (bailout) in March."

☆ Analysis: Cash-strapped countries face IMF bailout delays as debt talks drag on
▼ + stars: | 2023-03-02 | by ( Jorgelina Do Rosario | ) www.reuters.com time to read: +7 min

IMF funding is often the sole financial lifeline available to countries in a debt crunch, and key to unlocking other financing sources, with delays putting pressure on government finances, companies and populations. Though staff agreements can be reached without financing assurances, the IMF board needs them to approve the programme. Chinese Premier Li Keqiang said on Wednesday the country is willing to "constructively" participate in solving debt problems of relevant countries under a multilateral framework. But Beijing has always emphasised all creditors should follow the principle of "joint action, fair burden" in debt settlements. Adding another layer of complexity to these debt talks, the Common Framework doesn't lay out precise rules on how a debt restructuring with bilateral creditors should work.

☆ World Bank's IFC to provide Sri Lanka with $400 mln financing
▼ + stars: | 2023-02-27 | by ( ) www.reuters.com time to read: +1 min

COLOMBO, Feb 27 (Reuters) - The International Finance Corporation (IFC), the World Bank's investment arm, said it will provide Sri Lanka a $400 million cross-currency swap facility to help fund essential imports. Three private banks, which together deal with over 30% of Sri Lanka's remittances and exports, will receive the facility to fund essential imports, including medicine, food and fertiliser, the IFC said in a statement on Monday. The funds will provide a much needed foreign exchange cushion for Sri Lanka, which is grappling with its worst financial crisis in over seven decades partly triggered by a severe shortage of dollars. IFC is also working on further plans to support client banks with other long-term funding and advisory services in the future, the statement added. Sri Lanka signed a preliminary agreement with the International Monetary Fund (IMF) for a $2.9 billion bailout last September but has to put its debt on a sustainable repayment track before the funds can be disbursed.

☆ Sri Lanka investment board approves $442 mln Adani Green wind power plants
▼ + stars: | 2023-02-22 | by ( ) www.reuters.com time to read: +2 min

COLOMBO, Feb 22 (Reuters) - Sri Lanka's Board of Investment on Wednesday approved two wind power plants by India's Adani Green Energy Ltd (ADNA.NS) with a total investment of $442 million, a statement issued by the board said. "The two wind power plants of 350 MW are scheduled to be commissioned in two years and accordingly, they will be added to the national grid by 2025," the statement added. The Adani Group has denied any wrongdoing. The Sri Lankan Board of Investment statement said the Adani wind power project will generate 1,500 to 2,000 new job opportunities. Sri Lanka also aims to export renewable energy from its northern areas to southern India.

☆ Sri Lanka seen returning to growth by year-end, president says
▼ + stars: | 2023-02-08 | by ( ) www.reuters.com time to read: +1 min

COLOMBO, Feb 8 (Reuters) - Sri Lanka's economy is expected to grow again from the end of this year and the government wants the country to exit bankruptcy by 2026, President Ranil Wickremesinghe told parliament on Wednesday. Wickremesinghe said the government could turn around the economy if Sri Lankans tolerated high direct taxes for another six months. Wickremesinghe said the aim was to reduce inflation to single digits by the end of the year. Sri Lanka's key inflation rate, the Colombo Consumer Price Index (LKCCPI=ECI), eased to 54.2% in January from 57.2% in December. Reporting by Uditha Jayasinghe; Editing by Clarence Fernandez and Raju GopalakrishnanOur Standards: The Thomson Reuters Trust Principles.

☆ Sri Lanka completing pre-requisites for IMF aid - President
▼ + stars: | 2023-02-04 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +2 min

COLOMBO, Feb 4 (Reuters) - Sri Lanka is completing the pre-requisites to unlock a $2.9 billion bailout from the International Monetary Fund (IMF) and expects rapid approval from the global lender, President Ranil Wickremesinghe said on Saturday. "We are successfully completing the difficult stage required to get support from the International Monetary Fund. We expect to get their consent without delay," Wickremesinghe said in his address to the nation to mark the 75th Independence Day. Sri Lanka is currently focused on getting financing assurances from key bilateral creditors China and Japan. Sri Lanka's central bank estimates an economic turnaround in the second half of 2023 and inflation to reach single digits by the end of this year.

☆ Sri Lanka economy could shrink by -3.5% to -4%, president says
▼ + stars: | 2023-01-28 | by ( ) www.reuters.com time to read: +1 min

COLOMBO, Jan 28 (Reuters) - Sri Lanka's economy could contract by -3.5 or -4.0% in 2023 after shrinking -11% last year, President Ranil Wickremesinghe said on Saturday. "From 2024, we will take this economy to positive growth. Speaking at a religious event, he said: "The growth rate of the economy in 2022 was -11% and could be -3.5 or -4.0% this year." "No one can prevent the country from falling into crisis again similar to May and June last year," Wickremesinghe said. Reporting by Uditha Jayasinghe; writing by Rupam Jain; editing by Jason Neely and Angus MacSwanOur Standards: The Thomson Reuters Trust Principles.

☆ Sri Lanka holds rates steady to rein in inflation, as expected
▼ + stars: | 2023-01-25 | by ( ) www.reuters.com time to read: 1 min

COLOMBO, Jan 25 (Reuters) - Sri Lanka's central bank held interest rates steady for a third straight meeting on Wednesday, as widely expected, saying the prevailing tight monetary stance is critical to reining in inflationary pressures. The Central Bank of Sri Lanka had increased rates by a massive 950 basis points between August 2021 to July 2022 to tame stubbornly high inflation. The Standing Lending Facility (LKSLFR=ECI) rate was held steady at 15.50% while the Standing Deposit Facility Rate (LKSDFR=ECI) was kept unchanged at 14.50%. Thirteen out of 14 economists and analysts polled by Reuters expected CBSL to hold rates. Reporting by Swati Bhat and Uditha Jayasinghe; Editing by Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.

[1/2] Drivers push auto rickshaws in a line to buy petrol from a fuel station amid Sri Lanka's economic crisis, in Colombo, Sri Lanka, July 29, 2022. Regional rivals China and India are the biggest bilateral lenders to Sri Lanka, a country of 22 million people that is facing its worst economic crisis in seven decades. At the end of 2020, China EximBank had loaned Sri Lanka $2.83 billion which is 3.5% of the island's debt, according to an IMF report released in March last year. "The bank will support Sri Lanka in your application for the IMF Extended Fund Facility (EFF) to help relieve the liquidity strain," China's letter said. DEBT SUSTAINABILITYIn a letter directly addressed to the IMF, India said last week that the financing or debt relief provided by Export-Import Bank of India would be consistent with restoring debt sustainability under the IMF-supported program.

Regional rivals China and India are the biggest bilateral lenders to Sri Lanka, a country of 22 million people that is facing its worst economic crisis in seven decades. According to the letter, the Export-Import Bank of China said it was going to provide an extension on the debt service due in 2022 and 2023 as an immediate contingency measure based on Sri Lanka's request. At the end of 2020, China EXIM bank had loaned Sri Lanka $2.83 billion which is 3.5% of the island's debt, according to an IMF report released in March last year. "The bank will support Sri Lanka in your application for the IMF Extended Fund Facility (EFF) to help relieve the liquidity strain," the letter said. Sri Lanka's foreign and finance ministries did not immediately respond to questions from Reuters.

☆ Sri Lanka hopeful of completing debt restructuring in six months, says cenbank chief
▼ + stars: | 2023-01-24 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +2 min

COLOMBO, Jan 24 (Reuters) - Sri Lanka is committed to meeting all its debt repayments and is hoping to complete debt restructuring negotiations in the next six months, the country's central bank chief P. Nandalal Weerasinghe said on Tuesday. India last week told the IMF that it strongly supports Sri Lanka's debt restructuring plan. The biggest uncertainty is the timeframe for the debt restructuring. It is only after debt sustainability is assured can Sri Lanka return to a sustainable growth path," he added. Sri Lanka's National Consumer Price Index (NCPI) (LKNCPI=ECI) eased year-on-year to 59.2% in December, after a 65% rise in November, data on Monday showed.

☆ India says it is committed to boosting investment in crisis-hit Sri Lanka
▼ + stars: | 2023-01-20 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +2 min

"We count on the government of Sri Lanka to provide a more business friendly environment to create a powerful pull factor." India has told the global lender that it strongly supports Sri Lanka's debt restructuring plan, with Sri Lanka owing about$1 billion to its nearest neighbour. We extended financial assurances to the IMF to clear the way for Sri Lanka to move forward." China is Sri Lanka's largest bilateral lender and the last remaining major creditor to yet to agree to the plan. Sri Lanka owed Chinese lenders $7.4 billion, or nearly a fifth of its public external debt, by the end of last year, calculations by the China Africa Research Initiative show.

☆ India foreign minister visits Sri Lanka with stronger ties, China in focus
▼ + stars: | 2023-01-19 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +3 min

During his two-day visit, his third to Sri Lanka since 2021, minister Subrahmanyam Jaishankar will look to strengthen India's ties with its debt-ridden neighbour and sign several key deals. The two countries are also expected to sign a Memorandum of Understanding for a renewable power project covering three islands in Sri Lanka's north during Jaishankar's visit, two sources at Sri Lanka's power and energy ministry said. Jaishankar will meet Sri Lanka's president on Friday morning, his office confirmed. He will also hold discussions with Sri Lanka's prime minister and foreign minister, according to a statement from India's foreign ministry. "The U.S. stands ready to assist Sri Lanka to unlock IMF assistance when all creditors agree to fair and equitable treatment," Julie Chung, the U.S. ambassador to Sri Lanka, said in a tweet on Thursday.

COLOMBO, Jan 18 (Reuters) - India has told the International Monetary Fund that it strongly supports Sri Lanka's debt restructuring plan as the island nation seeks a $2.9 billion loan from the global lender, according to a letter seen by Reuters. "We hereby confirm our strong support for Sri Lanka's prospective (loan) program and commit to supporting Sri Lanka with financing/debt relief consistent with restoring Sri Lanka's public debt sustainability," Indian finance ministry official Rajat Kumar Mishra told the IMF chief in a letter dated Jan. 16. Sri Lanka owes India around $1 billion that will come under the debt restructuring plan, a source familiar with the matter told Reuters earlier this week. New Delhi separately provided Sri Lanka with about $4 billion in rapid assistance between January and July last year, including credit lines, a currency swap arrangement and deferred import payments. Sri Lanka owed Chinese lenders $7.4 billion - nearly a fifth of its public external debt - by the end of last year, according to calculations by the China Africa Research Initiative (CARI).

☆ India tells IMF it backs Sri Lanka's debt restructuring plan, source says
▼ + stars: | 2023-01-17 | by ( ) www.reuters.com time to read: +3 min

[1/2] A medical worker talks to a vendor selling household goods and food for patients and their family members, outside Apeksha Hospital, Colombo, Sri Lanka, August 11, 2022. Sri Lanka's finance ministry did not immediately respond to a request for comment. Sri Lanka owes India around $1 billion that will come under the debt restructuring plan, the source said. "Talks with bilateral lenders including India and China to restructure Sri Lanka's debt are progressing well and we are hopeful of finalising support from the IMF in the first quarter of 2023," Sri Lanka's cabinet spokesperson, Bandula Gunawardana, told reporters on Tuesday. The IMF has stressed the importance of joint talks involving three of Sri Lanka's main bilateral creditors - China, Japan and India.

[1/3] Drivers push auto rickshaws in a line to buy petrol from a fuel station amid Sri Lanka's economic crisis, in Colombo, Sri Lanka, July 29, 2022. India's foreign ministry did not respond to questions from Reuters on its plans and strategic aims in Sri Lanka. New Delhi has long been concerned about China's clout in its neighbourhood, including Nepal, Bangladesh and Sri Lanka. "And as far as Sri Lanka is concerned, we don't want to contribute to any escalation of tension between any countries." "Sri Lanka has clearly benefited from being the closest neighbour to the most powerful country in the region.

☆ Sri Lanka's cancer patients struggle amid economic chaos
▼ + stars: | 2022-12-22 | by ( ) www.reuters.com time to read: +6 min

The 32-year-old vegetable farmer was diagnosed with lung cancer in 2021 and started receiving treatment earlier this year just as Sri Lanka's economy went into free-fall. Amid crippling fuel scarcity and weeks of unrest, Kumarasinghe said he was unable to travel the 155 km (96 miles) between his home and Sri Lanka's main cancer hospital on the outskirts of the country's largest city, Colombo, for treatment. Kumarasinghe is among hundreds of cancer patients who have had their treatment upended by Sri Lanka's worst economic crisis since independence from Britain in 1948. Hospitals countrywide have struggled to contend with severe drug shortages, which have worsened over the last eight months, a representative of Sri Lanka's largest doctors union told Reuters. Sri Lanka's health ministry and senior health officials did not respond to calls from Reuters.

☆ Sri Lanka's economy shrinks 11.8% in second-worst quarterly performance
▼ + stars: | 2022-12-15 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +2 min

COLOMBO, Dec 15 (Reuters) - Sri Lanka's economy shrank 11.8% in the July-September quarter from a year ago, government data showed on Thursday, the second-worst quarterly contraction ever for the country going through a severe financial crisis. Economic mismanagement and the impact of the COVID-19 pandemic have left Sri Lanka short of dollars for essential imports including food, fuel, fertilisers and medicine. "This is the second-worst contraction Sri Lanka has experienced in a quarter after a 16.4% contraction in the second quarter of 2020," said Dimantha Mathew, head of research at First Capital. Sri Lanka's central bank estimates the economy will contract by about 8% in 2022. The economy had contracted 8.4% year-on-year in the second quarter, one of the worst performances in the island of 22 million people.

☆ Exclusive: Sri Lanka expects up to $8 bln more in loans, asset restructuring
▼ + stars: | 2022-12-15 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +3 min

[1/2] Sri Lanka's Foreign Minister Ali Sabry speaks during an interview with Reuters at his office, in Colombo, Sri Lanka December 14, 2022. Sabry said Sri Lanka was still waiting for "letters of assurance" for debt restructuring from its largest bilateral creditor China, as well as India. The two countries have backed the restructuring efforts and Sri Lanka has shared documents and data with them, he said. Overall, Sri Lanka's economy has improved with essential imports such as fuel and food becoming regular, Sabry said. "So that should start in the next quarter of next year with the IMF loan coming in, other multilateral agencies coming in.

☆ World Bank approves Sri Lanka's concessional funding request
▼ + stars: | 2022-12-06 | by ( ) www.reuters.com time to read: +1 min

COLOMBO, Dec 6 (Reuters) - The World Bank has approved crisis-hit Sri Lanka's request to access concessional financing from the International Development Association so as to help stabilise its economy, the lender said on Tuesday. Soaring inflation, a weakening currency and low foreign exchange reserves have left the island nation of 22 million struggling to pay for imports of essentials such as food, fuel and medicine. Through the IDA, Sri Lanka will receive concessional financing, technical assistance, and policy advice from the World Bank to implement reforms towards economic recovery. Access to IDA's concessional financing would also alleviate debt service pressures as it offers more favourable terms, the World Bank said in a statement. Reporting by Uditha Jayasinghe; Writing by Sudipto Ganguly; Editing by Clarence FernandezOur Standards: The Thomson Reuters Trust Principles.

COLOMBO, Nov 24 (Reuters) - Sri Lanka's central bank on Thursday threatened administrative intervention to control high market interest rates that it regarded as out of line with the inflation outlook. Any such action, interpreted by economists as meaning it might push market rates down, would lower the government's high borrowing costs. However, it was unclear how the central bank could force investors to support public finances at lower rates than they expected. "If an appropriate downward adjustment in the market interest rates would not take place in line with the envisaged disinflation path, the central bank will be compelled to impose administrative measures to prevent any undue movements in market interest rates," CBSL said in a statement. "The statement was quite aggressive in saying they are prepared to use non-policy rate tools to nudge market rates, including deposit rates, lower," he added.

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