IMF Approves US$206M Emergency Aid for Sri Lanka 🇱🇰

The IMF Executive Board has approved immediate emergency financial support of US$206 million (SDR150.5 million) for Sri Lanka under the Rapid Financing Instrument (RFI). • This aid is crucial to address urgent balance-of-payments and fiscal pressures caused by the catastrophic Cyclone Ditwah, which struck on November 28, claiming over 600 lives and displacing over 100,000 people. • The cyclone caused widespread destruction to infrastructure and livelihoods, creating significant humanitarian and reconstruction needs. • Sri Lanka's government has responded swiftly with relief measures, supported by strong fiscal performance in 2025. • The Central Bank of Sri Lanka is prepared to offer liquidity support to the financial system if required. • Due to the cyclone's impact, the Fifth Review under the existing Extended Fund Facility (EFF) has been deferred, with discussions set to resume in early 2026 to assess recovery and reconstruction needs. • Despite the setback, authorities remain committed to the IMF-supported economic reform program, which has shown positive results in economic recovery, price stability, and reserve rebuilding, although GDP has not yet reached pre-crisis levels.