The IMF is considering approving a loan for Sri Lanka, even without China's assurance of debt-restructuring support, Bloomberg News said.
Under a rarely used policy, the global lender may consider approving the loan, as the only prerequisite hindering the go-ahead is China's formal assurance, it reported, citing people familiar with the matter.
"The Sri Lankan authorities continue to seek from their official bilateral creditors financing assurances so that the Fund's Executive Board can consider their request for an IMF arrangement," an IMF spokesperson said in a statement to Reuters.
The lender said it was premature to discuss the precise IMF policy modalities that could be applied, adding that IMF staff continues to engage with Sri Lankan authorities on completing upfront policy measures.
Earlier in February, the IMF said Sri Lanka's US$2.9 billion bailout package was set to be approved as soon as the country obtained adequate assurances from bilateral creditors and met remaining requirements.
President expects IMF loan in March
Meanwhile, President Ranil Wickremesinghe announced the IMF loan is expected to be received in March.
At a meeting with rice mill owners at the Presidential Secretariat on February 16, he also said the possibility of reducing bank interest rates is being considered in line with the gradual drop of inflation rate.
Rice mill owners noted that production cost of rice has increased due to various factors, including the rise in fuel prices, electricity charges, machinery maintenance and transportation costs, and production and administrative expenses.
They also pointed out the difficulty of paying a high interest rate of 28 per cent on bank loans taken to purchase paddy.
With rice mill owners calling for relief for their industry, The President acknowledged their concerns and said it was the government's expectation to provide all possible relief to consumers as well as farmers.
The President instructed officials to seek means of increasing paddy production by reducing production costs and finding solutions to the problems faced by rice mill owners without delay.
