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IMF program in Sri Lanka ‘on hold’ - reports

The International Monetary Fund’s program has been suspended due to the ongoing political crisis on the island, according to a report in The Morning on Sunday.

IMF official spokesperson Gerry Rice told The Sunday Morning that the programme with Sri Lanka, a three-year extended arrangement of about $ 1.5 billion which was approved in 2016, “is on hold pending further clarity on the political situation”.

His comments come as Sri Lanka’s Central Bank Governor Indrajit Coomaraswamy told reporters of the IMF schedule on the island and admitted that “clearly that has got delayed now”.

Sri Lanka plunged into political crisis last month after the president sacked the prime minister, Ranil Wickremesinghe and appointed the former president, Mahinda Rajapaksa, who oversaw the killing of tens of thousands of Tamils in 2009, as premier. The crisis on the island has seen calls for sanctions and tourists numbers plummet.

The International Monetary Fund (IMF) stated earlier this month that it was “monitoring the situation closely”.

Last month the ratings agency Moody's also expressed concern over Sri Lanka, stating the political crisis was credit negative. Moody's warned the country may struggle to refinance external debt at an affordable rate early next year.