The International Monetary Fund (IMF) clarified that Sri Lanka’s Extended Fund Facility (EFF) program is not on hold, although the fifth review has been postponed to reassess economic conditions following the recent cyclone. This was stated by IMF Mission Chief for Sri Lanka, Evan Papageorgiou, at the end of the IMF staff visit to Sri Lanka.
Papageorgiou explained that the discussions centered on evaluating the cyclone’s economic impact, understanding the authorities’ fiscal and monetary policy intentions, and determining how the IMF-supported program should adapt to emerging uncertainties. He emphasized that the fundamental structure of the EFF program remains intact, noting that Sri Lanka’s performance under the program had been robust prior to the natural disaster.
“The program itself stands. The five pillars of the program remain the same,” Papageorgiou stated, acknowledging that the cyclone has introduced additional uncertainties that may affect specific quantitative performance criteria. He mentioned that any potential adjustments to targets would be discussed with the authorities during the next round of engagements, and the IMF mission is expected to return to Sri Lanka in the coming weeks.
Addressing a query on whether the EFF had been placed on hold after the disbursement of Rapid Financing Instrument (RFI) support, Papageorgiou refuted the claim. “There is no such thing as the program being on hold,” he clarified, explaining that the postponement of the fifth review was specifically to allow time to revisit assumptions impacted by the cyclone.
He further confirmed that the next formal milestone under the program will be the fifth review while mentioning that the possibility of combining future reviews remains open for discussion.
