Govt’s move to renegotiate EFF commended | Sunday Observer

Govt’s move to renegotiate EFF commended

Economists and financial analysts have commended the government’s move to renegotiate with the IMF to continue the Extended Fund Facility (EFF) program with the aim of extending it further to support the fast depleting foreign reserve base in the country.

Professor of Economics, University of Colombo, Sirimal Abeyratne said resuming the program with the IMF is a vital move to keep one’s nose above water as high growth performance and rapid export growth are yet to be realised.

“Fiscal space is getting squeezed further. External finance is still in disarray. Debt obligations have to be met soon. Many want to pull each other’s leg as the country approaches an election cycle. Given this background, further borrowing is necessary not only to keep our nose above water but also to loosen our belts. Many are displeased over the absence of foreign investments but it is not so much the case with foreign borrowing,” Prof. Abeyratne said.

Given the scale of decline in the value of the rupee and the quantum of foreign reserves, extending the program with the foreign donor is essential, financial experts said.