The delegation led by newly appointed Finance Minister Ali Sabry will hold talks with the International Monetary Fund (IMF) between April 19 and 24.
Sabry has said Sri Lanka is seeking a $4 billion bailout from the IMF after previously resisting calls to seek a facility from the global lender.
The visit comes days after the Treasury Department announced on Tuesday that it is suspending repayments of foreign debt, including government-to-government bonds and loans, pending the completion of a loan restructuring program with the International Monetary Fund (IMF). Sri Lanka had to pay $7 billion in debt this year.
This was the first-ever default by Sri Lanka in its history since 1948, and the country’s 22 million people face crippling 12-hour power cuts and extreme scarcity of food, fuel and other essentials such as medicines.
The Securities and Exchange Commission of Sri Lanka (SEC) announced on Saturday that the Colombo Stock Exchange will remain temporarily closed for a week starting Monday to give investors the opportunity to have “greater clarity and understanding” of the current economic conditions in crisis-stricken countries. Sri Lanka that would help them “make informed investment decisions”.
Sri Lanka is facing its worst economic crisis since it gained independence from the UK in 1948. The economic crisis also sparked political unrest on the island, with citizens holding nationwide street protests for weeks over prolonged power cuts and shortages of fuel, food and other daily essentials and demanding the impeachment of President Gotabaya Rajapaksa.
Earlier this month, Sri Lanka’s entire cabinet — except President Gotabaya and his older brother, Prime Minister Mahinda Rajapaksa — resigned after thousands of people violated a nationwide state of emergency and curfew and joined street protests denouncing the government.
According to sources, President Gotabaya has made arrangements to swear to a smaller cabinet soon. There will be no members of the Rajapaksa family other than Prime Minister Mahinda.
President Gotabaya had fired his brother and Finance Minister Basil Rajapaksa from office earlier this month and invited opposition parties to join a unity cabinet to address the public’s anger at the hardship caused by the economic crisis. The opposition rejected the offer to form a unity cabinet. The opposition is due to table a no-confidence motion against the government next week.
With the acute shortage of forex, a $500 million Indian line of credit for fuel imports has provided a lifeline to the island nation.
India recently announced a $1 billion credit line to Sri Lanka as part of its financial assistance to the country to help it cope with the economic crisis following an earlier $500 billion credit line in February to help the country purchase of petroleum products.
President Rajapaksa has defended his government’s actions, saying that the currency crisis was not his fault and that the economic downturn was largely caused by a pandemic, with tourism revenues and the island’s domestic remittances declining.