FINANCIAL CHRONICLE – There could be significant changes to the conditions regarding Sri Lanka’s reform programme with the International Monetary Fund (IMF) during the upcoming review, due to external shocks from the escalation in the Middle East, according to Central Bank Governor Nandalal Weerasinghe.
An IMF staff team will be in Colombo from March 26 to April 9 to hold discussions on the island nation’s fifth and sixth reviews of Sri Lanka’s reform programme.
The reviews follow the impact of Cyclone Ditwah, a natural disaster, and the ongoing conflict in the Middle East, which has resulted in energy prices rising by more than 35 percent in Sri Lanka over the past 16 days.
Analysts indicate that the spillover effects of higher energy costs are expected to reduce the purchasing power of Sri Lankans amidst rising inflationary expectations and diminishing dollar inflows.
The IMF has yet to complete the fifth review of the US$3 billion extended fund facility, which was originally anticipated to be finalized in December of the previous year. However, the repercussions of Cyclone Ditwah have necessitated additional assessments by the IMF due to the increased costs associated with reconstruction and rebuilding efforts.
Consequently, Sri Lanka has not yet received the sixth tranche of the programme. If the combined fifth and sixth reviews are successfully completed, the island nation is expected to receive approximately US$700 million from both the sixth and seventh tranches.
(Colombo/March 25/2026)
