Sri Lanka’s political crisis puts IMF loan negotiations on hold

Nov 21, 2018 (LBO) - The International Monetary Fund (IMF) loan facility to Sri Lanka, approved in mid-2016, has been put on hold due to the islands prevailing political crisis, a foreign media report said. The IMF approved the loan facility on the condition of comprehensive economic reforms. Speaking to media two weeks before the political crisis in Sri Lanka,the IMF team commented Sri Lanka would need a strong 2019 Budget, aiming at further fiscal consolidation, to secure debt on a sustainable downward path and support investor confidence as large debt repayments are coming due. Analysts say that it is unlikely that a budget for 2019 will be presented to Parliament, this month because of the prevailing political situation. Following President Maithripala Sirisena actions on the Oct. 26 to sack the incumbent Prime Minsiter Ranil Wickremesinghe due to differences the island nation has plunged into political dead lock resulting in no proper  government in power.