The International Monetary Fund (IMF) has said that they are “closely monitoring” the Sri Lanka’s recent currency swap deal of $1.5 billion with China, reported Colombopage. 

“We continue to closely monitor these economic policy financial developments in Sri Lanka including the recent agreement on a swap line with the People’s Bank of China,” Gery Rice, IMF’s director of communications, was quoted as saying by Colombopage. 

For months, the Sri Lankan government had been in talks with several governments, and global lenders for funding. The country has recently signed a $1.5 billion currency swap deal with China. 

Earlier, it had also sought a currency swap deal with India. However, reports suggested India had told the Sri Lankan government that any extension of existing funding was contingent on Sri Lanka having a staff-level agreement for an IMF program.

IMF, too, had also received an emergency funding request last year from the Sri Lankan government. But, Sri Lanka’s economic challenges and public debt are presenting problems, said Rice. 

The assessment of the Sri Lanka’s request for funding took a long time due to these problems, however, we haven’t reached any understanding. 

The COVID-19 pandemic affected the country’s tourism sectors and further exacerbated the balance of payment.