Sri Lanka reaches IMF staff-level agreement for seventh program review

The International Monetary Fund (IMF) has reached a staff-level agreement with Sri Lanka regarding the seventh review of its Extended Fund Facility (EFF) program. This agreement signals a consensus between IMF technical teams and Sri Lankan authorities on the nation's economic performance and reform progress.

Pending formal approval from the IMF Executive Board, the agreement could unlock approximately US$345 million in funding. If all requirements are met, including the alignment of the 2027 budget with program conditions and the verification of financing assurances, Sri Lanka will gain access to Special Drawing Rights (SDR) equivalent to that amount. This would bring the total IMF disbursements to the country to approximately US$2.7 billion.

The program is part of a broader US$2.9 billion effort to stabilize the economy following Sri Lanka's severe 2022 crisis, which was characterized by a collapse in foreign reserves and a sovereign debt default. While inflation has cooled, the IMF noted that the recovery remains subject to risks, including global trade uncertainties and geopolitical tensions in the Middle East.