IMF Mission Chief Says Sri Lanka's Policy Framework 'Considerably Stronger' Ahead of May 27 Board Vote

International Monetary Fund mission chief for Sri Lanka Evan Papageorgiou said Thursday the country’s policy framework is “considerably stronger than in the past,” delivering a strong endorsement six days before the IMF Executive Board considers the combined Fifth and Sixth Reviews of the Extended Fund Facility on May 27.

“Sri Lanka’s reform program continues to move forward,” Papageorgiou said in remarks posted on LinkedIn. He stressed that progress in restoring macroeconomic stability, rebuilding reserves and strengthening confidence has been “recognised by the public, investors and stakeholders.”

The Board decision next Wednesday could unlock the sixth and seventh tranches of the EFF, together worth approximately USD 700 million.

The mission chief’s comments arrive against a backdrop of sharp rupee depreciation this month. Central Bank Governor Nandalal Weerasinghe and Deputy Finance Minister Anil Jayantha Fernando have attributed the slide to external conditions rather than domestic weakness.

“Recent global developments have brought renewed pressures, as is the case for many economies in a challenging external environment,” Papageorgiou wrote. “Navigating these shocks is never straightforward, but Sri Lanka’s policy framework today is considerably stronger than in the past.”

He coupled the praise with a warning. “Maintaining a consistent policy course and continuing to allow the economy to adjust to evolving conditions will be key to sustaining the gains achieved so far,” he said.

Papageorgiou said the IMF looks forward to “continued close engagement with the Sri Lankan authorities as the reform agenda advances.”

IMF Asia-Pacific Department Director Krishna Srinivasan, the mission chief’s superior, separately echoed the message in a social-media post carried by Newswire on Friday, reiterating that Sri Lankan authorities had made “significant progress” and that the economy was on a “firmer footing” despite the renewed external pressure.

The endorsement comes the same day Opposition Leader Sajith Premadasa called for the government to begin negotiating a successor programme, warning the current EFF will end with reserves well below target. Analyst Ganeshan Wignaraja has separately warned Sri Lanka should plan for an 18th IMF programme. The CBSL Governor confirmed last week that the $700 million tranche disbursement is expected by May 27.