## Sri Lanka: Request for an Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Sri Lanka

_IMF Staff Country Reports, March 20, 2023_

## Source details

**Canonical URL:** [Sri Lanka: Request for an Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Sri Lanka](https://www.imf.org/en/publications/cr/issues/2023/03/20/sri-lanka-request-for-an-extended-arrangement-under-the-extended-fund-facility-press-531191)

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## Bibliographic details
- Published: March 20, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400238987.002

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### Program objectives and overview
- Presents Sri Lanka’s Request for an Extended Arrangement under the Extended Fund Facility (EFF).
- Objectives of the EFF-supported program:
  - restore macroeconomic stability and debt sustainability,
  - safeguard financial stability,
  - step up structural reforms to unlock Sri Lanka’s growth potential.
- Program measures are designed to protect the most vulnerable and improve governance.

### Macroeconomic policy guidance and measures
- Fiscal and monetary stance:
  - Emphasis on staying committed to the multipronged disinflation strategy to safeguard the credibility of the inflation-targeting regime.
- Exchange rate and reserves:
  - Greater exchange rate flexibility recently introduced by the authorities is expected to help rebuild the reserve buffer as market confidence returns.
- Financial stability:
  - Safeguarding financial stability is an explicit program objective.

### Governance, anti-corruption, and institutional reforms
- Ongoing efforts to tackle corruption should continue, including revamping anti-corruption legislation.
- The ongoing IMF governance diagnostic mission assessing Sri Lanka’s anticorruption and governance framework should guide a more comprehensive anti-corruption reform agenda.
- Improving governance is highlighted as integral to program success.

### Debt treatment and creditor engagement
- Close collaboration between Sri Lanka and all its creditors is critical to expedite a debt treatment that will restore debt sustainability consistent with program parameters.

### Subjects and keywords (as provided)
- Subject: Fiscal consolidation, Fiscal policy, Foreign exchange, Inflation, International organization, Monetary policy, Prices, Public debt, Revenue administration
- Keywords: arrears to Iran, Fiscal consolidation, Global, IMF program parameter, Inflation, LIOA policy, staff appraisal, staff supplement

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_Source: https://www.imf.org/en/publications/cr/issues/2023/03/20/sri-lanka-request-for-an-extended-arrangement-under-the-extended-fund-facility-press-531191_