Sri Lanka’s finance minister meets senior IMF official amid economic crisis

COLOMBO, March 14 (Reuters) – Sri Lanka’s finance minister spoke to a senior International Monetary Fund (IMF) official on Monday, two sources said, as the island nation seeks help to cope to falling reserves, a falling currency and soaring inflation. .

The director of the IMF’s Asia and Pacific department, Changyong Rhee, met with finance minister Basil Rajapaksa and treasury secretary SR Atygalle, two finance ministry officials told Reuters.

Sri Lanka is expected to begin formal negotiations with the IMF in April on a possible program that could boost reserves and put growth on a sustainable path. Read more

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During Monday’s talks, officials discussed details of the IMF’s latest review of the economy and assessments presented by IMF executive directors at an IMF board meeting in late February.

Rhee meets Sri Lankan President Gotabaya Rajapaksa on Tuesday.

“The talks were wide-ranging and covered major challenges facing the economy,” one of the ministry officials said, asking not to be named given the sensitivity of the talks.

“At the moment, the focus is on how Sri Lanka can get support from the IMF. Discussions on specific proposals will come later,” the official added, adding that Rajapaksa would brief the cabinet on the discussions during a weekly meeting on Monday evening.

Sri Lanka was hit by a dollar drought with reserves falling to $2.31 billion in February. The country is struggling to pay for essential imports, including fuel, food and medicine.

Chronic shortages have hit Sri Lankans hard with power cuts, long queues at pumps and record levels of inflation.

Last week, the Sri Lankan rupee fell 30% after the government allowed the currency to float freely, pushing prices up further.

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Reporting by Uditha Jayasinghe; Editing by Alasdair Pal and Edmund Blair

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