Govt. confident of securing $ 200 m RFI from IMF

The Government yesterday expressed confidence in securing $ 200 million from the International Monetary Fund (IMF) under the Rapid Financing Instrument (RFI), as it moves to manage urgent foreign exchange needs following the devastation caused by Cyclone Ditwah, whilst keeping its broader debt restructuring program on track.

Addressing a special media briefing, Finance and Planning Deputy Minister Dr. Anil Jayantha Fernando said Sri Lanka is confident of receiving around $ 200 million under the RFI, stressing that the request is fully justified under IMF rules given the extraordinary circumstances created by the disaster.

“This is a special situation. That is why we requested the RFI. It is our right to do so in a disaster situation,” he said, assuring that the facility is being sought to meet immediate financing pressures without destabilising the country’s ongoing IMF-supported reform framework or commitments.

The RFI request, amounting to SDR 150.5 million, or about 26% of Sri Lanka’s IMF quota, is currently under consideration and subject to approval by the IMF Executive Board, which is scheduled to meet tomorrow (19). 

“We are very confident that we will receive the RFI,” he said, adding that the facility is designed to provide rapid support without undermining the broader reform framework.

Clarifying public concerns over debt repayments, Dr. Fernando said it was incorrect to assume that Sri Lanka is not servicing its debt until 2028. He explained that while repayments on restructured bilateral debt and International Sovereign Bonds are scheduled to resume in 2028, the Government has continued to meet other obligations. 

“In 2025, we have repaid more than $ 760 million compared to 2024,” he said, noting that financial buffers have been built to ensure compliance with the IMF-mandated debt target of 4.5% of GDP.

He added that all financing decisions are being taken within the parameters of medium-term borrowing and are guided by data-driven assessments. 

Dr. Fernando acknowledged that discussions may be required on whether the debt repayment timeline starting in 2028 needs to be revisited in light of the cyclone’s impact, but stressed that any such engagement would be strictly data-driven. 

“All our discussions are based on data. Any RFI-related adjustments will be made so as not to disrupt the existing framework,” he said.

Earlier this month, President Anura Kumara Dissanayake confirmed that Sri Lanka had formally turned to the IMF for rapid assistance to address immediate foreign exchange pressures caused by the disaster. “To meet our immediate need for foreign exchange, we have requested relief of $ 200 million from the IMF. We believe they will respond positively to this,” the President told Parliament.

Sri Lanka had been expecting an Extended Fund Facility (EFF) disbursement of about $ 347 million in December following the Fifth Review. However, the urgent foreign exchange pressures triggered by Cyclone Ditwah prompted the Government to seek immediate relief through the RFI. However, Dr. Fernando said this is now likely to be delayed till early next year, as the Government is submitting a new Rs. 500 billion Supplementary Estimate that must be reviewed as part of the IMF process.

An IMF team is expected to visit Sri Lanka next month to renegotiate a staff-level agreement in line with the new fiscal situation to complete the Fifth Review originally set for 15 December, as RFI support is being extended in addition to the EFF arrangement.

The Deputy Minister also highlighted that safeguarding vulnerable communities remains a key condition of the existing IMF program, a priority that has taken on greater urgency in the aftermath of Cyclone Ditwah.

He said the emergency financing would help meet immediate balance-of-payments needs, whilst allowing the Government to continue its reform agenda without compromising social protection commitments.