Central Bank Governor Nandalal Weerasinghe has pushed back against claims that Sri Lanka risks losing International Monetary Fund (IMF) support, saying the country remains in full compliance with its programme benchmarks.
Speaking at a press conference, Weerasinghe said the IMF programme does not prohibit fuel subsidies. He noted that Sri Lanka currently maintains a subsidy of about Rs. 100 per litre on diesel and Rs. 20 per litre on petrol, and that these fall within the framework permitted under the arrangement.
The Governor said the net international reserve (NIR) targets had already been adjusted in the latest programme review, and that approval from the IMF Executive Board is expected soon. He reaffirmed that the country continues to meet the programme’s quantitative and structural conditions.
The comments come as the Central Bank moves to defend its policy stance after raising the Overnight Policy Rate by 100 basis points to 8.75% — its first hike in a year — to curb demand-driven inflation. The fuel subsidies Weerasinghe referenced add to the cost pressures facing the state, with the Ceylon Petroleum Corporation’s monthly crude bill having climbed sharply in recent months.
Sri Lanka’s multi-year IMF-supported reform programme remains the anchor of its post-default recovery, with the Fund and partners having reaffirmed their backing at successive review milestones.
