We closely monitor Sri Lanka’s developments including USD1.5bn currency swap with China: IMF

International Monetary Fund (IMF) says that they continue to closely monitor economic policy and financial developments in Sri Lanka including the recent agreement on a swap line with the People’s Bank of China for $1.5 billion.

Speaking at the IMF press briefing, Gerry Rice of the Communications Department said that the assessment for emergency financial support to help fight the COVID pandemic has taken longer than for other countries due to Sri Lanka’s daunting economic challenges and high public debt.

“We did receive a request from the Sri Lankan authorities for emergency financial support to help fight the COVID pandemic,” Gerry Rice said.

According to him, the assessment of that support has taken longer than for other countries due to Sri Lanka’s daunting economic challenges and high public debt.

“So we have sought, but not reached understanding, on how to fulfill the key requirements for what could be a rapid financing instrument which would include policies to continue ensuring debt sustainability to address the balance of payment challenges including from the COVID‑19 impact on tourism and to preserve international reserves.”

Sri Lanka has relied on import restrictions since last year and recently introduced additional measures such as a requirement to convert 25 percent of export proceeds.

“We continue to closely monitor these economic policy financial developments in Sri Lanka including the recent agreement on a swap line with the People’s Bank of China.”