Published on: October 20, 2023

Debt restructuring accelerated through IMF agreement – State Minister for Finance Shehan Semasinghe

State Minister for Finance Shehan Semasinghe stated that the Agreement entered with the IMF and the staff-level agreement reached following the First Review of Sri Lanka’s Extended Fund Facility Arrangement will support to settle arrears owed to multilateral creditors while expediting the debt restructuring process.

The State Minister further said that Sri Lanka is poised to receive the second tranche of US$ 330 million subsequent to the approval of this Staff-Level Agreement by the IMF Executive Board.

State Minister Shehan Semasinghe made these remarks at a press conference held at the Presidential Media Centre (PMC), today (20) under the theme ‘Collective Path to a stable country’.

In his further remarks, Minister Semasinghe elaborated on the journey to reach this pivotal Staff-Level Agreement:

“Last night, we successfully reached the staff-level Agreement, a crucial step in securing the second tranche under our agreement with the IMF through the Extended Fund Facility. Prior to this achievement, a team from the International Monetary Fund conducted an extensive two-week review in Sri Lanka, engaging in detailed discussions on various topics. Given the complexity and scope of the discussions, it was not feasible to reach an agreement instantly.

Subsequently, we continued our deliberations during the annual meeting of the International Monetary Fund and the World Bank, held in Morocco. There, we engaged in in-depth discussions to clarify various aspects. Even then, we found it necessary to seek further clarifications on various matters, leading to continued discussions through online platform once we returned to Sri Lanka. The agreement, as it stands today, is the result of concerted efforts and dialogues involving officials from the International Monetary Fund, the Central Bank, and the Ministry of Finance.”

Despite the favourable position Sri Lanka held with the International Monetary Fund in March 2023, subsequent disruptions and misinterpretations arose in recent weeks. State Minister Semasinghe emphasized, “We categorically stated within and outside of Parliament that there is no reason to fear the approval of the executive committee or the release of the second instalment. As a government, we maintained our confidence.”

The State Minister underscored that the staff-level agreement, marking the completion of the first review of the program with the International Monetary Fund, plays a pivotal role in facilitating the payment of arrears to multilateral creditors and expediting the process of debt restructuring. He reiterated that Sri Lanka is set to receive the second tranche of US$ 330 million following the approval of the IMF’s Executive Board.

Additionally, State Minister Semasinghe acknowledged the leadership and the guidance of President Ranil Wickremesinghe in these endeavours, as well as the contributions of officials, including the Governor of the Central Bank and the Secretary of the Ministry of Finance, in making these achievements possible.

He noted that the Staff-Level Agreement will enable the World Bank, Asian Development Bank, and other multilateral financial institutions to make the remaining payments, further expediting debt restructuring efforts with international partners.

The State Minister expressed optimism that agreements related to debt restructuring may soon be finalized, aligning with the government’s objectives of reducing corruption and increasing transparency. He cited the IMF’s praise for Sri Lanka’s economic progress and noted that this reflects international confidence in the country’s economic prospects.


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