### 📈 CBSL Governor Calls for Revision of IMF Targets Post-Cyclone

Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe has highlighted the need to adjust the International Monetary Fund (IMF) targets under the Extended Fund Facility (EFF) due to the significant impact of Cyclone Ditwah. • Fiscal Adjustment & Recovery The 2026 budget, formulated prior to the disaster, must now accommodate unplanned reconstruction and relief spending. The World Bank estimates direct physical damage at US$ 4.1 Bn (approx. 4% of GDP), primarily affecting infrastructure and the agriculture sector. • Review Status & Emergency Funding The Fifth Review of the US$ 3 Bn EFF program—originally set for completion in late 2025—was deferred to allow for a full economic impact assessment. To bridge the gap, the IMF approved a US$ 206 Mn disbursement under the Rapid Financing Instrument (RFI), providing immediate liquidity without the delays of structural reviews. • Sectoral Impacts Agriculture: Devastated by the cyclone, posing risks to food security and rural livelihoods. Infrastructure: Extensive damage to roads, bridges, and power networks requiring massive capital expenditure. Apparel & Tea: Export logistics and production were temporarily disrupted by extreme weather. • Foreign Reserves Outlook Despite these shocks, the CBSL remains optimistic about external buffers, projecting official foreign reserves to reach approximately US$ 8 Bn by the end of 2026. _Note: Revisions to economic benchmarks will be discussed when the IMF mission team arrives later this month._