The Executive Board of the International Monetary Fund has approved a disbursement of SDR 150.5 million, approximately $206 million and equivalent to 26 percent of Sri Lanka’s quota, under the Rapid Financing Instrument.

The emergency support, announced by the IMF on December 19, 2025, is intended to help Sri Lanka address urgent balance-of-payments and fiscal pressures triggered by Cyclone Ditwah, which struck the country on November 28.

In a statement, the IMF said Sri Lankan authorities remain committed to their economic reform program supported by the Extended Fund Facility. The cyclone struck as the Fifth Review under the EFF was nearing completion. The IMF noted that, given the time required to assess the economic impact of the disaster and determine how the IMF-supported program can best assist Sri Lanka’s recovery and reconstruction while preserving its objectives and policy priorities, the Fifth Review has been deferred.

An IMF mission team is expected to visit Sri Lanka in early 2026 to resume discussions.

Following the Executive Board’s discussion, IMF Deputy Managing Director and Acting Chair Kenji Okamura issued a statement noting that Sri Lanka was hit by a catastrophic cyclone that claimed more than 600 lives and affected millions across the country.

“Flooding and landslides,” Okamura said, have displaced more than 100,000 people, destroyed critical infrastructure, and devastated livelihoods nationwide. He added that the disaster has created urgent humanitarian and reconstruction needs, generating significant fiscal pressures and balance-of-payments challenges. The emergency financial support provided by the IMF under the Rapid Financing Instrument will help address these pressures.

“The government responded swiftly with a package of relief measures, supported by strong fiscal overperformance in 2025. The Central Bank of Sri Lanka stands ready to provide liquidity support to the financial system if needed,” he said. “While recovery and reconstruction needs will be substantial, the authorities remain committed to maintaining fiscal prudence to safeguard fiscal and debt sustainability.”

Okamura also emphasized that all emergency spending will be carried out in full compliance with the Public Financial Management Act and supported by enhanced monitoring and regular public reporting in line with transparency and accountability standards. He added that the Central Bank will continue to refrain from monetary financing of the budget.

“The cyclone struck as Sri Lanka is emerging from a deep economic crisis and the IMF-supported reform program under the EFF is bearing fruit. Sustained adherence to the reform agenda has underpinned a robust economic recovery, price stability, substantial revenue-based fiscal consolidation, and progress rebuilding foreign exchange reserves. Nonetheless, the economy remains vulnerable and GDP has not recovered to its pre-crisis level,” he said.

According to Okamura, the authorities and the IMF team remain in close engagement and will resume discussions at the earliest possible opportunity. “The IMF stands with the people of Sri Lanka during this difficult time and will continue to support Sri Lanka’s recovery and reconstruction efforts,” he added.

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