Sri Lanka’s finance ministry said on Tuesday that the International Monetary Fund will think about giving money to debt-ridden Sri Lanka quickly after India makes a request.
There were formal talks with the IMF in Washington on Monday, led by Sri Lanka’s Finance Minister, Ali Sabry. The government hopes the talks will help them build up their reserves and get bridge loans to pay for things like fuel, food, and medicine.
Sri Lanka asked for help with its balance of payments through the “rapid financial instrument” window, which is meant for countries that need help right away. Shamir Zavahir, an aide to Sabry, said this on Twitter (NYSE: TWTR). But, he said, the global lender was not at first willing to grant the request.
Sri Lanka’s finance ministry said in a statement that the IMF has since told Minister Sabry that India has also asked for an RFI on Sri Lanka’s behalf.
It has been said that the IMF will look into the special request even though it doesn’t fit into the standard rules for issuing an RFI.“
People in Sri Lanka are now facing a huge financial disaster thanks to the effects of COVID-19 as well as rising fuel prices that have taken away money from their foreign reserves.
Those things have been running low for weeks now.
Gotabaya and Mahinda Rajapaksa are the presidents and prime ministers of the island nation of 22 million people. People are protesting in the streets because they don’t like how the two of them run the country.
The Indian weight in
According to Sabry, Sri Lanka is looking for $3 billion from a variety of sources, including the IMF and World Bank. This money could help Sri Lanka avoid a crisis.
Both India and China have already given Sri Lanka billions of dollars in aid. When Sabry met with Nirmala Sitharaman on the sidelines of the IMF meeting, both sides said they wanted to work more together.
During his meeting with Sitharaman, Sabry said that India would “fully support” Sri Lanka’s talks with the IMF, especially on the request for an extended fund facility.
Sources have told Reuters that India will keep helping its neighbor as it tries to get back some of the power it lost to China in the last few years. A lot of money comes from China, and it has also built ports and roads there.
Sri Lanka’s central bank said last week that it was putting a hold on paying back some of its foreign debt while it worked out a new deal.
There have been protests in Colombo for more than a week. They want the Rajapaksa family to leave power.
He kept up his call for a unity government in parliament on Tuesday. The opposition has said no.
Mahinda Rajapaksa: “It is not the goal of any government to keep its people in line and make them suffer from power cuts and other shortages.”
“We have asked for help and have gotten positive responses from the World Bank and other countries that want to help us, like the United Kingdom. Public waits will not last long.“
