The International Monetary Fund (IMF) said it had "fruitful technical discussions" with the Sri Lankan delegation for its loan request, in the backdrop of the ongoing economic crisis the country is facing.

At the recent 2022 IMF and World Bank Spring Meetings in Washington DC, senior IMF members including Managing Director Kristalina Georgieva, met with the Sri Lankan delegation, led by Finance Minister Ali Sabry and Central Bank of Sri Lanka Governor Nandalal Weerasinghe, and discussed policy actions to address the economic challenges the country is facing.

The IMF team for Sri Lanka conducted initial technical discussions with the delegation regarding an IMF-supported programme.

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“During April 18–22, the Sri Lankan delegation and the IMF team had fruitful technical discussions on the authorities’ request for an IMF-supported program," Masahiro Nozaki, mission chief for Sri Lanka, said in a statement.

The discussions covered the recent economic and financial developments in Sri Lanka, the need for implementing a credible and coherent strategy to restore macroeconomic stability and the importance of stronger social safety nets to mitigate the adverse impact of the current economic crisis on the poor and vulnerable, the statement said. The IMF team welcomed the authorities’ plan to engage in a collaborative dialogue with their creditors, it added.

“Going forward, the IMF team will support Sri Lanka’s efforts to overcome the current economic crisis by working closely with the authorities on their economic program, and by engaging with all other stakeholders in support of a timely resolution of the crisis," the statement said.

India has also agreed to extend an additional $500 million credit line to help Sri Lanka import fuel, Sabry said, adding that he was hopeful that New Delhi would consider handing out another $1 billion dollars as a credit line.

India has already agreed to defer $1.5 billion in import payments that Sri Lanka needs to make to the Asian Clearing Union. On April 22, New Delhi has also extended the tenure of a $400 million swap given in January this year, the Indian High Commission said.

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Sri Lanka has been struggling to pay for imports after its foreign exchange reserves plummeted sharply in recent times, causing a devaluation of its currency and spiralling inflation.

On April 12, Sri Lanka suspended its debt servicing for the first time in its history. Last week, the Sri Lankan government said it would temporarily default on $35.5 billion in foreign debt as the pandemic and the war in Ukraine made it impossible to make payments to overseas creditors.

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