We hope for a resolution of the current situation that would allow for our resumption of dialogue on an IMF-supported program. IMF said yesterday.
Director Communication Gerry Rice was presiding over the IMF press briefing.
“You may recall that in June, less than a month ago, things are moving so fast, but less than a month ago there was an IMF staff team in Colombo. And we did have discussions, actually, constructive discussions with the authorities on a set of economic policies and reforms that could be supported by, potentially by an IMF program. We don’t have a program with Sri Lanka right now. But we were discussing what could be a program.
I am seeing Heather Scott asking about — Heather’s got a couple of things. But Heather’s asking about Sri Lanka. Heather Scott, AFP. What are the prospects for aid for Sri Lanka given the political upheaval? Is the Fund considering any emergency bridge financing to help deal with the immediate crisis? Sri Lanka is much in the news. Let me ask if anyone else has a question on Sri Lanka and I’ll try and take a clutch of them. Matthew, hi.
QUESTIONER: Yeah, sure. Thanks a lot. I’ve been wanting to ask this. I mean, given the turmoil in the country and President — or not-President Gotabaya Rajapaksa now reportedly being in Singapore, I guess I wondered if you could specifically, what’s the relationship? Does this have to shake itself out, including the Prime Minister’s role, before the IMF can do anything? What is — I know you often say you won’t speak to political things, but this is kind of an extraordinary situation in which, you know, people are swimming in the presidential swimming pool. They held a mock IMF session in the presidential palace.
What is the sort of minimum of political stability that the IMF would see? Who are they talking to, I guess? That’s my question about Sri Lanka.
- RICE: Right. Good question. Is anyone else coming in on Sri Lanka or wants to? Okay. Then I will take a couple of questions we have from Heather and from Matthew.
So, like everyone else we are, of course, deeply concerned about the ongoing crisis, its impact on the Sri Lankan people, and particularly the poor and the vulnerable groups in Sri Lanka. Again, like everyone else, we’re closely monitoring the political and social developments there.
We hope for a resolution of the current situation that would allow for our resumption of dialogue on an IMF-supported program. You may recall that in June, less than a month ago, things are moving so fast, but less than a month ago there was an IMF staff team in Colombo. And we did have discussions, actually, constructive discussions with the authorities on a set of economic policies and reforms that could be supported by, potentially an IMF program. We don’t have a program with Sri Lanka right now. But we were discussing what could be a program.
Clearly, the political and the social emergency situation I guess we could characterize it and we all see what’s happening, you described it, Matthew, has, you know, interrupted those discussions and we hope to resume as soon as possible. In the meantime, you asked, you know, who we’re talking to, Matthew. We do have technical counterparts still in, you know, some of the key ministries in the central bank and the Ministry of Finance. So, we are able to continue discussions there.
But the, you know, the high-level discussions with the authorities that we would need to begin discussions on a program, we hope again, that these would be able to resume as soon as possible. So, you know, looking to do all we can in just an extraordinarily difficult situation.
Heather, I don’t have anything about emergency or bridge financing. You know, as I just described, we were having these discussions with Sri Lanka. And we hope to resume them as soon as the situation has stabilized a bit. And, of course, an important part of those discussions is the debt situation. Sri Lanka’s public debt is assessed as unsustainable and as is the case with every IMF program, not just the case of Sri Lanka, for approval by the Board. And we are not at that stage, but for approval by the Board, a program would require adequate assurances on debt sustainability. So, that’s what I have on this, you know, a situation that’s of great concern in Sri Lanka.”
