IMF mission in Sri Lanka for Article IV discussions, no program request

ECONOMYNEXT – A mission of the International Monetary Fund will be in Sri Lanka for regular annual consultations, Sri Lanka Mission chief Masahiro Nozaki said amid calls by some economists for a bailout.

“The IMF has not received a request for financial support from Sri Lanka recently, but the staff stands ready to discuss options if requested,” he said responding to media queries.

Sri Lanka has resisted going for an IMF program.

The Article IV team will be in Sri Lanka from December 7 to 20.

The IMF releases a staff report after the consultations. Many Article IV consultations were delayed or not done in 2020 amid the Covid-19 pandemic.

Sri Lanka is in the midst of a forex crisis brought on by liquidity injections made to enforce low rates amid fears of a sovereign default as reserves are depleted to redeem printed money at a
convertibility undertaking currently at 203 to the US dollar.

Sri Lanka has faced heightened external trouble from around 2015 when the country started targeting a call money rate with excess liquidity saying it was operating ‘flexible inflation targeting’. (Colombo/Nov25/2021)

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