On Thursday, the World Bank authorized $700 million in budgetary and welfare support for Sri Lanka, the largest financial tranche for the crisis-hit island nation since an International Monetary Fund (IMF) agreement in March.
Around $500 million of the cash will be used for financial support, with the remaining $200 million going towards social welfare for individuals who have been impacted the hardest by the crisis.
The World Bank’s country director for Sri Lanka, Faris Hadad-Zervos said, “Through a phased approach, the World Bank Group strategy focuses on early economic stabilization, structural reforms, and protection of the poor and vulnerable”.
“If sustained, these reforms can put the country back on the path towards a green, resilient, and inclusive development”, Mr. Zervos added.
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After the country’s foreign exchange hit historic lows and precipitated its first international debt default last year, Sri Lanka is facing its biggest financial crisis since its independence from Britain in 1948.
In March, the IMF granted a nearly $3 billion rescue, which Sri Lanka anticipates will result in further funding of up to $4 billion from the World Bank, the Asian Development Bank, and other international organizations.
This week, the island nation will announce a domestic debt restructuring programme in order to move forward with debt restructuring with bondholders and bilateral creditors such as China, Japan, and India.
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