Sri Lanka is seeking urgent financial support from the International Monetary Fund.
This comes in the midst of protests that erupted in the island nation while battling the effects of Covid-19.
According to the country’s finance minister, mismanagement of government of government finances and rising fuel prices have sapped foreign reserves.
A delegation headed by Sri Lanka’s finance minister Ali Sabry kicked off formal talks with the IMF in Washington for a programme the government hopes will help top up its reserves.
“The (foreign minister) made a request for a Rapid Financing Instrument (RFI) to mitigate the current supply chain issues, yet initially IMF of the view that it doesn’t meet their criteria,” Sabry’s aide Shamir Zavahir said on Twitter.
“However, India subsequently made representations on an RFI for (Sri Lanka) as well and IMF may consider this request due to the unique circumstances.”
He added that the IMF “appears to be positive” towards granting an extended fund facility – a longer facility of up to four years with easier, and longer, repayment terms. “Ideally if this can be expedited, it can help stabilise things in the short term till long-term solutions kick in,” he tweeted.
Sri Lanka is seeking $3bn in the coming months from multiple sources including the IMF, the World Bank and India to stave off the crisis, Sabry told Reuters earlier this month.
Last week, the country’s central bank said it was suspending repayment on some of its foreign debt pending a restructure.
In the commercial capital Colombo, protests demanding the removal of President Gotabaya Rajapaksa have dragged on for more than a week.
Sri Lanka’s opposition leader Sajith Premadasa is pushing to build support in parliament to change the constitution and remove the Rajapaksa family from power.