WASHINGTON: Sri Lanka's President said that International Monetary Fund has approved its request for $ 2.9 billion bailout, raising hopes for an easing of island nation's dire economic crisis.

IMF's board also confirmed it has approved loan, which clears way for release of funds and kicks off four-year programme designed to shore up South Asian nation's economy.

"I express my gratitude to IMF and our international partners for their support as we look to get economy back on track for long term through prudent fiscal management and our ambitious reform agenda," President Ranil Wickremesinghe said in statement.

Sri Lanka defaulted on its foreign debt in April 2022 as country plunged into its worst economic downturn since independence because of major shortage of foreign currency reserves.

Widespread protests over economic mismanagement, acute shortages of food, fuel and medicines and runaway inflation forced President Gotabaya Rajapaksa to flee country and resign in July.

Rajapaksa was replaced by Wickremesinghe as President who has implemented tough spending cuts and tax hikes in an attempt to secure IMF assistance.

Beijing had said this year it was offering two-year moratorium on its loans to Sri Lanka, but concession fell short of IMF expectations for sustainability of island's debt.

Published in The Daily National Courier, March, 21 2023

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