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IMF deal clears path for $700M boost to Lanka’s recovery

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Sri Lanka and the International Monetary Fund (IMF) have reached staff-level agreement on economic policies to conclude the combined Fifth and Sixth Reviews of Sri Lanka’s reform program supported by the IMF’s Extended Fund Facility.

Once the review is approved by the IMF Executive Board, Sri Lanka will have access to about US$700 million in financing, the IMF said yesterday in a statement.

Full text of the IMF statement: An International Monetary Fund (IMF) mission team led by Evan Papageorgiou visited Sri Lanka from March 26 to April 9, 2026, to discuss recent macroeconomic developments and progress in implementing economic and financial policies under the Extended Fund Facility (EFF) arrangement. At the end of the mission, Mr. Papageorgiou issued the following statement:

“IMF staff and the Sri Lankan authorities have reached staff-level agreement on the combined Fifth and Sixth Reviews under the 4-year Extended Fund Facility (EFF) arrangement. The arrangement was approved by the IMF Executive Board for a total amount of SDR 2.3 billion (about US$3 billion) on March 20, 2023.

“The staff-level agreement is subject to IMF Executive Board approval, contingent on: (i) the restoration of cost-recovery electricity and fuel pricing while protecting the vulnerable and (ii) the completion of the financing assurances review, to confirm multilateral partners’ financing contributions and assess adequate progress with debt restructuring.

“Upon completion of the Executive Board review, Sri Lanka would have access to SDR 508 million (about US$700 million), bringing the total IMF financial support disbursed under this arrangement to SDR 1,778 million (about US$2.4 billion).

“Sri Lanka’s ambitious reform agenda continues to deliver commendable outcomes. The economy grew by 5 percent y/y in 2025. Inflation has returned to positive territory and rebounded to 2.2 percent y/y in March, and gross official reserves reached US$7 billion in end-March 2026. Fiscal performance in 2025 was strong, primarily supported by taxes on motor vehicle imports. Debt restructuring is nearing completion, with the successful completion of Sri Lankan Airlines’ debt exchange and further progress in finalising remaining bilateral agreements.

“Sri Lanka is significantly exposed to the Middle East conflict, which has heightened energy prices, disrupted a key air hub for tourists, and affected Sri Lankans working in the region. Authorities have ameliorated disruptions to economic activity by securing sufficient fuel supplies for households and industries. At the same time, the country needs to address the infrastructure and spending needs caused by Cyclone Ditwah. Heightened downside risks to the economy from disaster risks,persistent trade policy uncertainty and the conflict in the Middle East emphasize the urgency to accelerate the reform momentum to safeguard macroeconomic stability, enhance Sri Lanka’s resilience to shocks, and maintain the economy on a path toward recovery and inclusive growth.

“On this front, it is important to continue building fiscal space through strong revenue measures and prudent spending execution. This requires sustained efforts to improve tax compliance, broaden the tax base, address revenue leakages, and enhance public financial management. It is instrumental to restore and maintain cost-recovery fuel and electricity pricing while assisting the most vulnerable. Continued vigilance is needed to minimize fiscal risks and safeguard fiscal discipline.

“As Sri Lanka starts building back better, projects should be prioritized judiciously and spending executed transparently and in compliance with the Public Financial Management Act. Any fiscal support in response to exogenous shocks should be well-targeted, carefully costed, and timebound. Protecting the poor and vulnerable, who are disproportionately affected, should remain a priority, and this calls for the steadfast strengthening of social safety nets by improving their targeting, adequacy, coverage, and shock-responsiveness.

“It is important for monetary policy to remain data-dependent and agile to safeguard price stability in the face of shocks. Central bank independence should continue to be upheld, including by continuing to prohibit monetary financing of the budget. Rebuilding foreign reserves while allowing for exchange rate flexibility is a necessity amid global uncertainty. Resolving non-performing loans, promoting sound credit growth, and addressing vulnerabilities in some small licensed finance companies will help safeguard financial stability.

“The publication of the 2026 government action plan on governance reforms is welcome; effective implementation will help advance the anti-corruption agenda and support growth. It will be key to uphold the independence of Sri Lanka’s anti-corruption body (CIABOC), support the reliability of the beneficial ownership registry, and strengthen fiscal governance through sound legislation on public-private partnerships, state-owned enterprises, public procurement, and public asset management. Unlocking strong and durable growth for all Sri Lankans requires staying the course on reforms, including by sustaining trade liberalization efforts, accelerating digitalization initiatives, streamlining business regulations, and modernizing labor legislation to reduce rigidities.

“The IMF team held meetings with President and Finance Minister Anura Kumara Dissanayake, Labor Minister and Deputy Minister of Finance and Planning Prof. Anil Jayantha Fernando, Deputy Minister of Economic Development Nishantha Jayaweera, Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe, Secretary to the Treasury Dr. Harshana Suriyapperuma, Senior Economic Advisor to the President  Duminda Hulangamuwa, Chief Advisor to the President on Digital Economy Dr. Hans Wijayasuriya, Governor of Southern Province Prof. Susiripala Manawadu, and other senior government and CBSL officials. The IMF team also met with parliamentarians, representatives from the private sector, civil society organizations, and development partners.

“We would like to thank the authorities for the excellent collaboration during the mission, including during our visit to Galle in the Southern Province. We reaffirm our commitment to support Sri Lanka at this uncertain time.”



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Sun directly overhead Bentota, Thiniyawala, Iththakanda, Udawalawe, and Kataragama about 12.08 noon t9day (06)

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The sun is going to be directly over the latitudes of Sri Lanka from  28th of August to 07th of September due to its apparent southward relative motion.

The nearest places of Sri Lanka over which the sun is
overhead today (06) are Bentota, Thiniyawala, Iththakanda, Udawalawe, and Kataragama about 12.08 noon

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UN welcomes Lanka’s anti-graft drive, seeks end to impunity

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MONETABRIEF –The UN human rights chief on Thursday welcomed Sri Lanka’s robust anti-corruption drive but urged President Anura Kumara Dissanayake to apply the same vigour to ending impunity for continuing rights abuses.

In its latest report to the UN Human Rights Council in Geneva, High Commissioner Volker Turk noted that cases of torture and deaths in custody continued to be reported in Sri Lanka despite the change of administration.

“While it is encouraging that the Sri Lankan authorities have taken action to address corruption cases and some crimes linked to the post-war period, more needs to be done to end the long legacy of impunity in the country,” the rights chief said.

His report, covering October 2025 to July 2026, notes steps to tackle corruption, including high-profile arrests and investigations linked to political killings, enforced disappearances and the 2019 Easter Sunday attacks.

He said it had been a difficult period for Mr Dissanayake’s new government, following the devastating Cyclone Ditwah which killed some 650 people and devastated much of the island and a global spike in energy prices.

The report noted that the Human Rights Commission of Sri Lanka had documented 602 cases of torture and ill-treatment in 2025 and 138 cases by April 2026.

The local commission also reported 18 deaths in custody last year and a further three by April this year. In one such case, a 40-year-old inmate detained for a minor drug-related offence died at Welikada Prison in Colombo on 3 May, allegedly from severe beatings.

“This Government still has an opportunity to turn the tide on decades of abuse of executive power, repressive laws and custodial violence, and entrenched impunity,” Turk said.

He regretted that the government had yet to deliver on its promise of legal and institutional reforms and continued to apply the repressive Prevention of Terrorism Act (PTA), resulting in arbitrary arrests and prolonged detention without charge.

Civil society actors, activists and journalists remained subject to state surveillance, while tensions over land and religious sites continued to simmer, the report said.

It also highlighted violent riots at Negombo Prison in July, which left at least 32 dead, underscoring the urgent need for prison reform to address systemic issues, including severe overcrowding.

The UN Human Rights Office had received at least 16 allegations of surveillance against civil society actors, activists and journalists, the report said.

There was “a clear and continuing pattern of state surveillance, intimidation and reprisals by military and intelligence officials, including from the Criminal Investigations Department or the Terrorism Investigation Division”.

“Individuals are repeatedly questioned about their travels, especially to Geneva and engagement with UN human rights processes, as well as their organizational affiliations, funding sources, and participation in protests or commemorative events.”

While the Government had continued to denounce racism and promote national unity, wider efforts to ensure truth and justice risked stalling and the momentum for transformative change being lost, the report warned.

Failures to effectively investigate and prosecute crimes under international law allegedly committed during the armed conflict persisted.

“It is crucial that there is decisive and meaningful action toward accountability for crimes and violations by all parties during the more than two-decade armed conflict,” Turk said.

He noted the recent decision by the Attorney-General to indict former Eastern Province Chief Minister Sivanesathurai Chandrakanthan, also known as Pillayan, and three others in connection with the abduction and murder of former Eastern University Vice-Chancellor Professor Sivasubramaniam Raveendranath in 2006.

“It is, however, regrettable that many other serious emblematic cases remain stalled for years, including the killing of 17 Action Contre La Faim aid workers in Muttur 20 years ago,” he said, calling for meaningful steps to resolve such delays.

The High Commissioner urged Sri Lanka to redouble its reconciliation and accountability efforts. He called for a moratorium on the use of the Prevention of Terrorism Act pending its repeal, as well as the release of long-term detainees held under it.

He also called for all individuals credibly accused of human rights violations to be excluded from senior positions in government, the security sector or the diplomatic service until such allegations were genuinely addressed and resolved.

He urged the Government to support victims’ memorialisation initiatives and to release military-occupied lands.

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Dispute which triggered listed company director being detained at BIA resolved

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A dispute between a wholly owned subsidiary  of Lanka Realty Investments PLC, Mulberry Holdings (Pvt) Ltd., and a contractor, Omni Engineering & Trading Solutions, that resulted in Executive Director Hisham Jamaldeen of Lanka Realty being stopped at Katunayake and prevented from leaving on a business visit to the UK has been resolved with Jamaldeen bailed and the travel ban imposed on him revoked by the Maligakanda Magistrate, Lanka Realty’s said in a Stock Exchange filing last week.

This followed Mulberry agreeing to pay Rs. 25 million to Omni on or before Sept. 26.

Following media reports of Jamaldeen being prevented from leaving the country at the BIA, Lanka Realty made two Stock Exchange filings on Sept. 3 – the first detailing the dispute between the two parties and the second indicating that the matter had been settled.

In the first filing, the Secretaries for Lanka Realty said:

“The article refers to Mr. Mohamed Hisham Jamaldeen, Executive Director of Lanka Realty Investments PLC and a Director of Mulberry Holdings (Pvt) Ltd, a wholly owned subsidiary of the Company and the developer of “Mulberry Residences” in Colombo 10.

“Mulberry Holdings (Pvt) Ltd entered into a construction contract with Mr. Randika of M/s Omni Engineering & Trading Solutions on 21st June 2022 for a sum of LKR 32,854,992.00), which is less than 1% of the total value of the “Mulberry Residences” Project which is around LKR 3.6 Billion.

“The said contract is governed by the CIDA/SBD1 Standard Bidding Document Conditions of Contract, which provides for adjudication and, if required, arbitration as the applicable dispute resolution process. The Company understands that the underlying matter relates to a contractual payment dispute involving Mulberry Holdings (Pvt) Ltd’s aforcsaid contract.

“Following a call received from the Colombo Crime Division (CCD), Mr. Jamaldeen went to the CCD on 25th August 2026 and provided a statement in relation to the matter inter alia explaining that the matter in dispute was arising from a civil contract. He was not arrested on that date and was not informed at that time or thereafter prior to receiving information at the Airport, that a travel ban had been imposed.

“On 2nd September 2026, while travelling overseas for business on a pre-arranged itinerary, Mr. Jamaldeen was informed at immigration of a travel ban imposed on 24th August 2026, following which he was arrested by the CCD. A bail application is expected to be made when Mr. Jamaldeen is produced before the Magistrate’s Court of Maligakanda today, 3rd September 2026.”

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