IMF Aid Without Reforms: Sri Lanka’s High-Stakes Gamble

Sri Lanka’s renewed request for emergency financing from the International Monetary Fund has placed the government at a critical crossroads, exposing significant economic and policy risks if assistance is sought without fully delivering on agreed reforms and benchmarks.

While the proposed Rapid Financing Instrument (RFI) of about US$200 million offers short-term relief following severe cyclone damage, it also intensifies scrutiny of the country’s reform credibility at a decisive moment in its IMF programme.

The IMF has indicated that consideration of Sri Lanka’s RFI request is now its immediate priority, with a Board decision expected shortly. However, this emergency request has come at a cost. Access to approximately US$347 million tied to the Fifth Review of the Extended Fund Facility (EFF) has been deferred to early 2026, delaying much-needed programme financing and prolonging uncertainty over future disbursements.

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