Sri Lanka crisis: Staff-level loan pact made with IMF, sources say

Sri Lanka and the International Monetary Fund (IMF) have reached a preliminary agreement on an emergency loan to the crisis-hit country, and a formal announcement will be made on Thursday, four sources with direct knowledge of the matter said.

The debt-laden island nation had sought up to $3 billion from the global lender, as it struggles with its worst economic crisis in more than seven decades. Sri Lankans have faced acute shortages of basic goods and sky-high prices for months.

Spokespersons for the IMF and the Sri Lankan government did not immediately respond to requests for comment.

Presenting an interim budget for the rest of the year, Sri Lankan President Ranil Wickremesinghe told the parliament on Tuesday that talks with the IMF had reached the "final stage".

Staff-level agreements are typically subject to the approval of the IMF management and its executive board, after which the recipient nations get access to funds.

A visiting IMF team held talks with Sri Lankan government officials (including the treasury secretary) late into the night on Tuesday, in order to address concerns on the political front, the sources said. Most of the technical details had been agreed to beforehand.

The country of 22 million was plunged into an intense political crisis last month, when the then-president Gotabaya Rajapaksa fled after a popular uprising against an acute shortage of basic goods and sky-high prices.

Rajapaksa was replaced by six-time prime minister Wickremesinghe, who also heads the finance department, and held several rounds of talks with the IMF team.

• Sri Lanka budget to bolster revenue and fight inflation as IMF talks progress