Sri Lanka's main Opposition on September 6 asked the government to table the agreement reached with the International Monetary Fund (IMF) in Parliament if they need its support for IMF-recommended economic reforms.
On September 1, the IMF reached a staff-level agreement to support Sri Lanka’s economic policies with a 48-month arrangement under the Extended Fund Facility (EFF) of about $2.9 billion.
The International Monetary Fund’s staff-level agreement with Sri Lanka
Sri Lanka is going through its worst economic crisis since its independence in 1948 which was triggered by a severe paucity of foreign exchange reserves.
Opposition and the Samagi Jana Balawegaya (SJB) leader Sajith Premadasa told Parliament on Tuesday that, given that Parliament has authority on public finance, the recently announced staff-level agreement with the IMF be tabled in Parliament, Economy Next reported.
SJB member of Parliament and Chairman of the Parliamentary Committee on Public Finance Harsha de Silva echoing Mr. Premadasa’s call said if the government needs the Opposition’s support in seeing IMF-recommended economic reforms through, the Parliament must be made aware of the contents of the agreement, the report added.
However, the Government responded by saying that the request would be put forward to the President and Prime Minister.
Central Bank Governor Nandalal Weerasinghe said on Monday that Sri Lanka had no practice of revealing IMF programmes to Parliament early and tax changes can only be revealed to the Parliament at the time of implementation.
Sri Lanka has had 16 IMF programmes in the past after balance of payments trouble was triggered by Sri Lanka’s intermediate regime central bank which prints money to suppress market interest rates leading to forex shortages.
Sri Lanka’s Finance Minister usually signs a memorandum of economic policies with the IMF as part of a programme, Governor Weerasinghe was quoted as saying by the report.
“At that stage, it has never been tabled in the Parliament to my knowledge and has not even been submitted to the Cabinet,” he said.
Leader of the House and Education Minister Susil Premajayantha said President and Finance Minister Ranil Wickremesinghe would keep legislators informed on the staff-level agreement as promised.
“The objectives of Sri Lanka’s new EFF-supported programme are to restore macroeconomic stability and debt sustainability while safeguarding financial stability, protecting the vulnerable, and stepping up structural reforms to address corruption vulnerabilities and unlock Sri Lanka’s growth potential,” the IMF said.
The IMF also said that debt relief from Sri Lanka’s creditors and additional financing from multilateral partners will be required to help ensure debt sustainability and close financing gaps.
Financing assurances to restore debt sustainability from Sri Lanka’s official creditors and making a good faith effort to reach a collaborative agreement with private creditors are crucial before the IMF can provide financial support to Sri Lanka.
