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No new loans for Sri Lanka without proper economic plan: World Bank

May 25, 2022 2:06:04 AM - economynext.com

ECONOMYNEXT – The World Bank said it cannot give new loans to Sri Lanka until a proper economic plan is in place though it is re-directing money from un-disbursed loans for immediate humanitarian needs of the poor, the sick and school children.

Sri Lanka is suffering the worst currency crisis in the history of its 72 year-old intermediate regime central bank with rupee collapsing from 200 to 380 to the US dollar and inflation soaring to around 30 percent by April.

“We are concerned for the people of Sri Lanka and are working in coordination with the IMF and other development partners in advising on appropriate policies to restore economic stability and broad-based growth,” the World Bank said

“Until an adequate macroeconomic policy framework is in place, the World Bank does not plan to offer new financing to Sri Lanka.”

The World Bank is only re-purposing already approved loans, the agency said saying reports about a new ‘bridge financing’ is not correct.

The International Monetary Fund has said Sri Lanka’s debt is unsustainable and has to be restructured and a new fiscal and monetary program is being developed.

Other multilateral lenders also require a macro-fiscal sign off to make sure that the new loans are able to be repaid and does not further put the country into a debt crisis. (Colombo/May25/2022)