World Bank to disburse $700m to Lanka and reallocate existing loans: report

The World Bank plans to disburse $700 million to crisis-stricken Sri Lanka by reallocating its existing loans, a move that will help the island nation grapple with a much-needed unprecedented economic crisis until a bailout with the IMF is being worked out, media reported on Monday.

Sri Lanka is on the verge of bankruptcy and suffers from severe shortages of basic commodities such as food, fuel, medicine and cooking gas.

For months citizens were forced to stand in long queues to buy the limited supplies.

World Bank Country Director Chiyo Kanda met with the Sri Lankan Foreign Minister last week and assured him that the agency would work with the Asian Development Bank (ADB), the Asian Investment Bank in infrastructure (AIIB) and the United Nations office to redirect their projects already underway. , reported the Colombo Gazette news portal.

Minister Peiris has requested assistance from the World Bank until long-term assistance materializes through the IMF, other international institutions and donor countries, the report says, citing a ministry statement Sri Lankan Foreign Affairs.

Therefore, Kanda assured Peiris that the global lender would disburse $700 million to Sri Lanka during these difficult times in the coming months, according to the report.

Earlier this month, the The International Monetary Fund (IMF) has said it remains committed to helping Sri Lanka in line with its policies, the Colombo Gazette reported.

Discussions at the technical level with Sri Lanka have started. They will continue in order to prepare the political discussions once a new government has been formed, the IMF said, quoted by the report.

During our virtual mission from May 9 to 23, discussions at the technical level have just started and have continued as planned in order to be fully prepared for political discussions once a new government is formed, the IMF said. in a press release.

The IMF also said it was following developments in Sri Lanka closely and was concerned about rising social tensions and violence.

In April, the two sides convened their first round of talks at IMF headquarters in Washington.

Sri Lanka is hoping for a Rapid Financing Facility (RFI) as well as an Extended Financing Facility (EFF) from the international financial body to help it deal with its foreign exchange shortages, which have triggered an economic crisis.

At the last meeting, the IMF assured to help the country with an amount of 300 to 600 million dollars.

On April 12, Sri Lanka suspended debt service for the first time in its history.

The island nation is facing its worst economic crisis since gaining independence from Britain in 1948.

The economic crisis has also sparked political unrest with a protest occupying the entrance to the president's office demanding his resignation which has been going on for more than 50 days.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear reader,

Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.

As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.

Support quality journalism and subscribe to Business Standard.

digital editor