COLOMBO: Sri Lanka is in talks with the International Monetary Fund (IMF) to borrow at least $3 billion via the lender’s extended fund facility (EFF), sources familiar with the matter said.

The island state’s government expects another round of technical talks with the IMF in early June and hopes to reach to a staff-level agreement as soon as the end of this month, two of the sources said.

A spokesperson for the IMF didn’t immediately reply to a request for comment. Spokespeople for Sri Lanka’s finance ministry and central bank didn’t respond to a request for comment.

Sri Lanka has requested a rescue plan to overcome its worst economic crisis since independence in 1948. It defaulted on some overseas debt earlier this year and is struggling to pay for imports of basics such as fuel and medicine.

An EFF programme, which would be the 17th IMF plan for the nation, requires countries to make structural economic reforms “to correct deep-rooted weaknesses,” according to the IMF’s website.

These programmes normally last three years with a grace period of 4-1/2 years to start paying back the loan, once the plan is approved.

A $3 billion deal would represent almost four times the country’s quota with the IMF.

Published in Dawn, June 2nd, 2022