World Bank readies Sri Lanka aid package as IMF calls loan talks ‘fruitful’
- Sri Lankan Finance Minister Ali Sabry has been in Washington this week talking to the IMF, the World Bank, India and others about financing help for his country
- Sri Lanka has suspended payments on portions of its US$51 billion in external debt; the World Bank said it was preparing an emergency aid package
The International Monetary Fund (IMF) said on Saturday it held “fruitful technical discussions” with Sri Lanka on its loan request, while the World Bank said it was preparing an emergency aid package for the crisis-stricken country.
Sri Lanka, an island country of 22 million people, is struggling to pay for imports amid a crushing debt crisis and sharp drop in foreign exchange reserves that has fuelled soaring inflation. Prolonged power cuts and shortages of fuel, food and medicines have sparked nationwide protests.
Sri Lankan Finance Minister Ali Sabry has been in Washington this week talking to the IMF, the World Bank, India and others about financing help for his country, which has suspended payments on portions of its US$51 billion in external debt.
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The World Bank’s emergency response package includes US$10 million to be made immediately available for the purchase of essential medicines, funds shifted from its ongoing Covid-19 health preparedness project, a World Bank spokesperson said.
The global lender, which along with the IMF held its spring meetings this week, did not provide a total value for its package, but Sabry said on Friday that about US$500 million in aid was being considered.
The World Bank spokesperson said the package would leverage existing bank-financed projects and repurpose funds to quickly provide medicines, meals for schoolchildren and cash transfers for poor and vulnerable households.
Support to provide cooking gas, basic food supplies, seeds and fertilisers and other essentials is also under discussion, the spokesperson said, adding that the World Bank was “deeply concerned” about the situation in Sri Lanka.