The International Monetary Fund hopes to complete rescue talks with Sri Lanka "as quickly as possible," Managing Director Kristalina Georgieva was reported as saying on Wednesday.
Speaking with Nikkei Asia in Tokyo, Georgieva has said the fund was deeply concerned about the well-being of the people in Sri Lanka, gripped by severe shortages of fuel, food and other essentials after its foreign reserves dried up.
She had made this statement hours before the country’s parliament elected Ranil Wickremesinghe as the President following the resignation of the previous President Gotabaya Rajapaksa.
Georgieva had said that the moment there is a government that they can continue discussions with, the IMF team will be in Sri Lanka adding that she was hopeful that based on the good technical work already done they would complete program negotiations as quickly as possible.
Georgieva has said that the IMF would work with any Sri Lankan administration as long as the next leader enjoys support and has the longevity to lead the country.
The managing director, who was stopping in the Japanese capital after attending the Group of 20 finance ministers meeting in Indonesia last week, went on to say: "Countries that are faced with severe problems of bad management need to understand that, in this context, markets are jittery. Sentiment is such that there is more anxiety. So if you need to be prudent in good times, you have to be even more prudent in bad times where we are today."
In the case of Sri Lanka, which "pre-emptively" defaulted on its foreign debt for the first time earlier this year after COVID-19 devastated its core tourism sector, the government was due to submit a debt restructuring plan to the IMF by next month.
"What we would need for the program is financial assurances that will be sustainable, not immediately, but that we have a credible plan to get to that point," Georgieva said. She added that the incoming government has "a very important role to play, reaching out to both bilateral creditors and private-sector creditors."
Sri Lanka's large creditors include Japan, China and India. Georgieva said that she has discussed the situation with the countries during her Asia trip, and was encouraged because "there is an understanding that protracted negotiations are simply not viable, that there has to be decisive action as early as the weeks after a [new] government is in place."
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