The government intends to complete Sri Lanka’s current International Monetary Fund programme when the four-year Extended Fund Facility expires in March 2027 and does not currently see a need for a successor arrangement tied to debt restructuring, Minister Bimal Rathnayake has said.
“We will definitely exit this agreement,” Rathnayake said of the current programme, according to Newswire. “But the IMF and the World Bank are international institutions. As a country operating within the global economic system, we have to maintain our dealings with them in a manner suitable for us.”
Rathnayake, who holds the Transport, Highways and Urban Development portfolio and is Leader of the House, was speaking in a television interview. Neither report names the channel.
What happens in March 2027
The current EFF was approved in March 2023 and is scheduled to expire on 19 March 2027. Two reviews remain under it.
The most recent IMF mission, which ran from 10 to 23 September, ended without a staff-level agreement on the seventh review. The Fund said afterwards that discussions with the government would continue “in the near term” on the policies and parameters needed to conclude it.
Exiting the programme would not end the relationship. IMF Mission Chief Evan Papageorgiou said this week that any request for a successor programme is a decision for the Sri Lankan government.
Criticism of the restructuring terms
Rathnayake said the government does not expect Sri Lanka to need another debt-restructuring programme, while acknowledging the country remains bound by existing repayment commitments for years to come.
He criticised terms negotiated under the previous administration, singling out mechanisms under which repayments to some creditors rise or fall with Sri Lanka’s economic performance.
“If we grow the economy, the amount of debt we have to repay increases,” he said, arguing this could limit the resources available to pass growth back to the public. He said the government is examining financial-market mechanisms to reduce that effect. Neither report names the instruments concerned.
Context
The remarks put the government on the opposite side of the argument from the Opposition. Three days ago, Opposition Leader Sajith Premadasa pressed the IMF on what indicators decide whether Sri Lanka needs a programme after the EFF. Sri Lanka was upgraded by Fitch to ‘B-’ with a stable outlook on 22 September, though analysts have warned that a lag in S&P and Moody’s ratings could complicate a 2027 return to bond markets.
A note on sourcing
Newswire filed this account at 12:33 a.m. and Hiru News at about 10:26 a.m. on Friday. The two reports track each other closely in wording and content, and both derive from the same interview; they are not independent confirmations of it.
