Sri Lanka will begin talks with the IMF starting from April 2022 as the island nation reels on the back of dwindling forex reserves. This comes after sources on Friday said that the country was open to seeking an IMF loan. In January, Sri Lanka had ruled out an IMF bailout, raising default risks on its $1bn 5.875% July dollar bond repayment despite calls from opposition leaders and experts to seek a bailout package. Central Bank Governor Ajith Nivard Cabraal said via a tweet late on Friday, “Meetings of Sri Lankan authorities with @IMFNews officials over the next few weeks are NOT for the purpose of #debt restructuring.” Sri Lanka has resorted to drastic measures like electricity cuts and import restrictions which have led to food shortages, whilst also recently devaluing the LKR by ~15% to LKR 230 to the dollar.

Sri Lanka’s dollar bonds were trading higher, up up over 1.5 points to 45-49 cents on the dollar.

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