SRI LANKA: On Thursday, the World Bank granted approval for a substantial financial assistance package of $700 million to Sri Lanka, marking the largest funding instalment provided to the crisis-ridden country since an International Monetary Fund (IMF) agreement in March.
Approximately $500 million will be designated for budgetary support, and the remaining $200 million will be specifically allocated to provide welfare support to those who have been most severely impacted by the crisis.
The World Bank Group policy employs a phased approach and emphasises early economic stabilisation, structural changes, and protection of the weak and vulnerable, according to Faris Hadad-Zervos, the World Bank’s country director for Sri Lanka.
If maintained, these reforms could return the nation to its previous course of sustainable, resilient, and inclusive development, as per Zervos.
Sri Lanka is grappling with the biggest financial crisis since gaining independence from Britain in 1948 after the nation’s foreign exchange hit historic lows and precipitated its first international debt default last year.
In March, the International Monetary Fund (IMF) approved a bailout package of approximately $3 billion, which Sri Lanka anticipates would bring further finance of up to $4 billion from the World Bank, the Asian Development Bank, and other international financial institutions.
The island nation is set to unveil a domestic debt restructuring programme this week, aiming to push forward with renegotiating its debt with bondholders and bilateral creditors, including India, Japan, and China.
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