Sri Lanka hopeful ...

The majority of Sri Lanka’s bilateral credit is held by the two non-paris Club countries China and India.

“We are very confident in the way the discussions are going ahead in getting their assurances. So, the IMF can submit the proposal to the Board sooner,”said Dr. Weerasinghe, expecting the assurances to be forthcoming in the next couple of weeks.

Meanwhile, the financing assurances from private creditors would mean Sri Lanka is making a ‘good faith’ effort to reach a collaborative agreement with them which includes engaging in early dialogue and sharing relevant information on a timely basis.

They have formed two creditor committees – one consisting of 100 members of international investors and another consisting of eight local private banks holding slightly in excess of a billion dollars worth ISBS.

Besides obtaining creditor assurances, Sri Lanka also has to make good on some prior actions such as raising taxes, as part of its revenue-based fiscal consolidation efforts, raise interest rates to contain consumption and investments and end monetary financing, allow greater foreign exchange rate flexibility, strengthen Central Bank independence, and embark on reforming state-owned enterprises.