The International Monetary Fund will consider providing quick financial assistance to debt-burdened Sri Lanka following representations by India, Sri Lanka's finance ministry said on Tuesday.
A delegation headed by Sri Lanka's Finance Minister Ali Sabry kicked off formal talks with the IMF in Washington on Monday for a programme the government hopes will help top up its reserves and attract bridge financing to pay for essential imports of fuel, food and medicines.
Shamir Zavahir, an aide to Mr Sabry, said on Twitter Sri Lanka asked for a loan under the rapid financial instrument (RFI) window, meant for countries needing urgent balance-of-payment support. But the global lender was initially not inclined to grant the request, he said.
"The IMF has subsequently informed Minister Sabry that India had also made representations on behalf of Sri Lanka for an RFI," Sri Lanka's finance ministry said.
"It had been communicated that IMF will consider the special request made despite it being outside of the standard circumstances for the issuance of an RFI."
Sri Lanka's devastating financial crisis has come as the effects of Covid-19 exacerbated mismanaged government finances and as rising prices of fuel sapped foreign reserves.
Fuel, power, food and medicines have been running low for weeks.
Street protests have erupted against President Gotabaya Rajapaksa and his brother, Prime Minister Mahinda Rajapaksa, in the island nation of 22 million people.
Sri Lanka is seeking $3 billion in the coming months from multiple sources including the IMF, the World Bank and India to stave off the crisis, Mr Sabry said earlier this month.
Both India and China have already extended billions of dollars in financial support to Sri Lanka.
Mr Sabry met his Indian counterpart Nirmala Sitharaman on the sidelines of the IMF deliberations, and both sides said they agreed to deepen their co-operation.
"India will fully support the deliberations of Sri Lanka with the IMF, especially on the special request made for expediting an extended fund facility," Mr Sabry's office said, citing his meeting with Ms Sitharaman.
Last week, Sri Lanka's central bank said it was suspending repayment on some of its foreign debt pending a restructure.
In the commercial capital Colombo, protests demanding the ouster of the Rajapaksas have dragged on for more than a week.
In parliament on Tuesday, the prime minister reiterated a call for a unity government that the opposition has rejected.
"It is not the wish of any government to keep their people in queues and make them suffer with power cuts and other shortages," he said.
"We have appealed for help and received positive responses from the World Bank and other friendly countries. We will not keep the public in lines for long."
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Demonstrators in Sri Lanka gather outside the Presidential Secretariat in Colombo as the country faces shortages in food, fuel and medicines after defaulting on its $51 billion debt. EPA -
Demonstrators camp in an area nicknamed the Gota-Go Village, close to the Presidential Secretariat in Colombo, Sri Lanka. Reuters -
Residents of Gota-Go Village in Colombo use their phones to organise their protest against President Gotabaya Rajapaksa's management of the economy. Reuters -
A demonstrator at Gota-Go Village in Colombo rests in one of the protest camp's many tents. Reuters -
Water bottles are shared among protesters inside Gota-Go Village in Colombo, Sri Lanka. Reuters -
Gota-Go Village in Colombo is a focus of opposition to Sri Lanka's President Gotabaya Rajapaksa's leadership. Reuters -
The demonstrators who gather at Gota-Go Village near the Presidential Secretariat in Colombo, Sri Lanka, fear the country's medical service is near collapse. Reuters -
Demonstrators distribute essentials such as water at Gota-Go Village in Colombo, Sri Lanka. Reuters -
Protesters in Colombo after President Gotabaya Rajapaksa lost his parliamentary majority. EPA -
Power cuts and fuel shortages across Sri Lanka bring protesters to the doorstep of President Gotabaya Rajapaksa in Colombo. AFP -
Protesters in Sri Lanka have made the centre of Colombo, the capital, the focus of their efforts to unseat President Gotabaya Rajapaksa. AFP -
People shout slogans during the protests. Reuters -
A Buddhist monk prepares a placard at a demonstration against the economic crisis. AFP -
Religious and secular groups unite in protest. AFP
