The International Monetary Fund (IMF) has released the Letter of Intent submitted by the Sri Lankan Government and the Central Bank of Sri Lanka following the completion of the combined Fifth and Sixth Reviews under the Extended Fund Facility (EFF) programme.

The letter, dated 13 May 2026 and signed by President and Finance Minister Anura Kumara Dissanayake and Central Bank Governor Dr. Nandalal Weerasinghe, outlines Sri Lanka’s progress under the IMF-supported programme and its commitments to continue economic reforms aimed at restoring macroeconomic stability and debt sustainability.

In the document, Sri Lanka noted that the economy recorded 5% growth in both 2024 and 2025, supported by improvements in revenue collection, reserve accumulation, and debt restructuring efforts. The Government also highlighted progress in strengthening public finances, rebuilding foreign reserves, and implementing governance reforms.

The Letter of Intent states that while temporary relief measures were introduced in response to Cyclone Ditwah and the impact of the Middle East conflict, the authorities remain committed to maintaining the programme’s fiscal targets.

The Government further reaffirmed its commitment to cost-recovery pricing for fuel and electricity, a key component of the IMF reform programme. According to the letter, temporary subsidies provided to ease the burden on households and businesses will remain within budgeted limits and are expected to be phased out by the end of September 2026.

Sri Lankan authorities informed the IMF that any future support for vulnerable groups would be delivered through targeted welfare programmes while preserving fiscal discipline and ensuring the sustainability of state-owned enterprises.

The letter also requested the IMF Executive Board’s approval for the combined Fifth and Sixth Reviews and access to SDR 508 million (approximately US$695 million) under the EFF arrangement.

The IMF Executive Board approved the reviews on 27 May 2026, enabling the immediate disbursement of the funds. The latest tranche brings Sri Lanka’s total IMF financing under the programme to approximately US$2.4 billion.

The publication of the Letter of Intent provides a detailed account of the commitments and policy measures agreed between Sri Lanka and the IMF as the country continues its economic recovery programme. (Newswire)

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