Broad help for Sri Lanka obligation exercise, change progress at IMF/WB meet: Pastor

State Minister for Finance Shehan Semasinghe stated that there was widespread support for Sri Lanka's debt restructuring efforts and acknowledgment of progress made under an International Monetary Fund (IMF) program during a meeting of the IMF and World Bank.

In a Twitter post after attending the meetings, Minister Semasinghe highlighted the recognition of Sri Lanka's economic recovery and financial stability as significant advancements towards the country's prosperity by stakeholders and international partners. He expressed appreciation for the widespread support for Sri Lanka's debt restructuring process and reiterated the country's commitment to reaching restructuring targets for a speedy debt resolution, ensuring debt sustainability and comparability of debt treatment.

Although Sri Lanka concluded initial talks with sovereign bondholders in March without reaching a deal, progress has been made, including an initial agreement with bilateral creditors. International partners have appreciated reforms made under President Ranil Wickremesinghe, according to Minister Semasinghe.

He also noted that Sri Lanka's currency, the rupee, has been allowed to appreciate by the central bank amid a deflationary monetary policy. This appreciation has led to lower energy and food prices, as well as benefits for workers near retirement and those on fixed salaries.

However, there are concerns about transparency regarding the basis for the rupee's appreciation, as well as pressure on the currency despite prudent monetary policy. The oversold position in the market following recent appreciation has affected the rupee's usefulness as a denominator of future value.