IMF delays Sri Lanka's loan discussion on political crisis

COLOMBO: The International Monetary Fund (IMF) said on Tuesday it had delayed discussions on Sri Lanka’s next loan tranche due to the country’s political crisis.

The IMF has disbursed over $1 billion out of a $1.5 billion three-year extended fund facility (EFF) loan it agreed in 2016. The aim was to avert a financial crisis and support the economic reform agenda of the government then in power.

That government was sacked on Oct. 26 by President Maithripala Sirisena due to differences with former prime minister Ranil Wickremesinghe, who was backing social market economic policies.

Since the removal of Wickremesinghe, Sirisena has dissolved the parliament and called for a fresh election, but the Supreme Court last week ordered a suspension of that decree until it had heard petitions challenging the move as unconstitutional, reports Reuters.

In September, the IMF said its mission had made significant progress toward “reaching a staff-level agreement with the government on completing the fifth review of the EFF and discussions will continue during the annual meetings of the IMF and World Bank in October”.