WASHINGTON/COLOMBO: The IMF has approved a USD 3 billion bailout programme to help debt-ridden Sri Lanka overcome its economic crisis and catalyse financial support from other development partners, a move welcomed by Colombo on Tuesday as a “historic milestone” in the critical period.

International Monetary Fund’s Executive Board approved on Monday a 48-month extended arrangement under its Extended Fund Facility (EFF) with an amount of SDR 2.286 billion (about USD 3 billion), according to a statement.

Special Drawing Rights (SDR) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund.

President Ranil Wickremesinghe on Tuesday welcomed the decision announced by the IMF. The programme will allow Sri Lanka to access financing of up to USD 7 billion from the IMF, International Financial Institutions (IFIs) and multilateral organisations, a statement said.

“This is a historic milestone as the government seeks to restore macroeconomic stability and achieve debt sustainability,” said a statement.

Earlier this month, Sri Lanka received IMF-compatible financing assurances from its official creditors, including Paris Club members, India and China, allowing the IMF to convene an Executive Board and consider Sri Lanka’s request for a loan, the statement said.

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