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FRESH IMF AGREEMENT PRESIDENT LEAVES ON THE TABLE

President leaves fresh IMF agreement on the table

President says any new agreement must support growth and preserve stability
Finance Ministry and Central Bank discussing shape of possible program
IMF earlier said further arrangement would depend on government’s priorities

Sri Lanka is keeping the door open to another International Monetary Fund (IMF) program, with President Anura Kumara Dissanayake signaling that growth must shape any fresh agreement as the country looks beyond crisis recovery.
Dissanayake yesterday shared the government was considering its options for continued IMF engagement after the current arrangement concludes.However, no final decision has been taken. Dissanayake said discussions involving senior economic officials, the Finance Ministry and Central Bank were underway to examine what a possible future program should look like.

Dissanayake shared his views at a fireside discussion at the inauguration of Sri Lanka Economic Summit 2026 last evening, organised by the Ceylon Chamber of Commerce.His responses at the discussion affirmed the government’s priority for the next phase, which is faster growth while protecting the stability restored following the economic crisis.He said the existing IMF program had largely focused on stabilizing the economy. A future agreement would need to support the country’s growth objectives without putting those gains at risk.The government would be prepared to enter another arrangement if it could reach an understanding with the IMF on that basis, Dissanayake noted.Whilst pointing out considerable progress in restoring stability, Dissanayake acknowledged that more work remained. Foreign exchange reserves had yet to reach the desired level and the country’s credit standing needed further improvement.

The question of another program had also surfaced during the IMF’s September mission, ahead of Dissanayake’s summit remarks.Speaking separately at a September 23 press briefing in Colombo, IMF Mission Chief for Sri Lanka Evan Papageorgiou said any request for a successor arrangement would depend on the government’s objectives and its assessment of whether another program was necessary.He noted that the IMF could continue supporting Sri Lanka outside a formal lending arrangement, including through financial sector assessments. At the time, two reviews remained under the existing Extended Fund Facility.

Since then, negotiations under the current program have advanced. Earlier this month, Sri Lanka and the IMF reached a staff-level agreement on the seventh review, paving the way for a further US $ 345 million in financing. The agreement requires the IMF Executive Board approval, a program-consistent 2027 Budget and completion of a financing assurances review. Once approved, the disbursement would take the total funding released under the program to about US $ 2.7 billion. The IMF continues to press for reforms to lift investment and strengthen the economy’s capacity to expand.

“Shifting from stabilization to transformation requires sustained momentum on structural reforms,” Papageorgiou said in the statement issued at the conclusion of the September mission. The IMF identified trade liberalization, modernization of business and labour regulations, wider access to finance and digitalization as priorities for improving the investment climate. Recent indicators show the distance Sri Lanka has travelled as well as the pressures it still faces.

The IMF warned that the Middle East war, uncertainty over global trade policy and El Niño continued to threaten the recovery. It called for stronger fiscal and external buffers, sustained revenue reforms and cost-recovery energy pricing, alongside measures to address the delays in public capital expenditure.