The IMF has further appreciated the efforts of the authorities to deepen the foreign exchange market while building up reserves and achieving enhanced exchange rate flexibility, the statement said.

The IMF has also maintained the view that the monetary policy must be focused on easing inflationary pressures and high credit growth.

Furthermore, the IMF has recognized the efforts taken by the authorities to achieve quantitative performance criteria set under the Extended Fund Facility (EFF). The EFF supported economic program is expected to improve macroeconomic stability of the country and bolster market confidence while strengthening external resilience in a challenging global environment.

The main objective of the EFF is to strengthen the Balance of Payments position of Sri Lanka while supporting the government’s economic reform agenda. Following the Executive Board’s discussion of the third review, the IMF acknowledged the stable macroeconomic and financial conditions of Sri Lanka, despite continuous weather-related supply shocks.

The Executive Board of the IMF completed the third review of the three-year (EFF) obtained by Sri Lanka, enabling the disbursement of the fourth tranche to the value of SDR 177.774 million (approximately USD 251.4 million).

With the disbursement of the fourth tranche, a total of USD 759.9 million has been received thus far by Sri Lanka on account of the EFF.