Friday Mar 27, 2026
Friday Mar 27, 2026
Thursday, 26 March 2026 00:10 - - {{hitsCtrl.values.hits}}
Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe yesterday signalled that upcoming discussions with the International Monetary Fund (IMF) could result in more significant changes than in previous program reviews, citing the scale of the current external shock, even as authorities aim to secure a staff-level agreement to complete two reviews simultaneously.
Responding to questions at the post-Monetary Policy Review media briefing of the CBSL, the Governor said the IMF delegation expected today (26) will engage with authorities on the evolving economic outlook, with a focus on assessing the impact of recent global developments and potential balance of payments (BOP) challenges.
“They will be here to discuss the new situation,” he said, noting that the IMF’s Managing Director had already announced that the objective of the upcoming mission is to reach a staff-level agreement for the completion of two reviews together.
Sri Lanka is currently under the IMF’s $ 2.9 billion Extended Fund Facility (EFF) program, which requires periodic reviews tied to reform progress and quantitative targets such as international net reserves (INR), fiscal consolidation, and structural benchmarks.
Dr. Weerasinghe acknowledged that shifting global conditions, particularly the ongoing Middle East conflict and its implications for energy prices and trade flows, could necessitate adjustments to policy targets and macroeconomic projections.
“Obviously, when the situation changes and the outlook is different, we will have to discuss during the mission visit. We have to discuss the new policies and what are the new targets,” he said.
He stressed that revisions to program conditions are not unusual, pointing out that each of the four reviews completed so far under the IMF program had involved adjustments reflecting prevailing economic circumstances.
“I don’t think any review, as I’ve said several times, even if you compare the four reviews already completed, review after review there have been changes to the conditions. Changes to the circumstances will continue to happen,” he said.
However, the Governor cautioned that the current external shock may be more significant than those encountered in previous review cycles.
“This time, changes may be more significant than the last several reviews, because this time, it is a significant shock,” he noted, referring to the global volatility triggered by geopolitical tensions in the Middle East.
Dr. Weerasinghe did not indicate any immediate breach of INR targets, but acknowledged that discussions with the IMF would cover the external sector outlook, including reserve buffers and BOP pressures.
Sri Lanka’s gross official reserves currently stand at $ 7.3 billion, providing what the CBSL has described as “good space” to absorb short-term external shocks. However, sustained disruptions in energy supplies or prolonged increases in global commodity prices could place pressure on foreign exchange outflows.
The Governor said authorities are awaiting detailed discussions with the IMF team over the coming weeks, as both sides assess how best to navigate the evolving economic landscape, whilst keeping Sri Lanka’s recovery program on track.
The IMF staff team will visit Sri Lanka from 26 March to 9 April to hold discussions with the authorities on the combined Fifth and Sixth Reviews of Sri Lanka’s reform program supported by the IMF’s EFF.
The IMF is yet to complete the Fifth Review of the EFF. The Fifth Review was originally expected to be completed in December last year and Cyclone Ditwah’s occurrence in November 2025 has led to some more assessment by the IMF due to additional expenses on reconstruction and rebuilding.
As a result, Sri Lanka is yet to receive the sixth tranche of the program. If the combined Fifth and Sixth Reviews are completed, Sri Lanka will receive around $ 700 million from both the sixth and seventh tranches. (CdeS)
