Sri Lanka to get 3-year grace for $206mn emergency IMF loan, base rate 3.27-pct
ECONOMYNEXT – Sri Lanka will have pay around 3.275 percent plus and some surcharges for the 206 million dollar Rapid Finance Instrument loan, Evan Papageorgiou, IMF Mission Chief for Sri Lanka said.
There have been concerns raised in Sri Lanka that the RFI loan is too expensive compared to other commercial borrowings.
The Rapid Finance Instrument, which was approved on December 19 has a three and a quarter year grace period and is repayable up to five years after that, Papageorgiou said.
“The basic rate of charge right now, by the way, that’s determined weekly, but right now, for the week of December 15th to 21st, where we are now, is 3.274 percent, which is the SDR interest rate plus a fixed margin, which is a standard for every member,” he said.
“And then, so this number is already very low : 3.28 percent, 3.27 percent, is already very low. There are surcharges on top of that, but there are surcharges actually kicking in only after a period of time. They are level-based.”
The surcharges are based on the level of access based on quota and may rise to 200 basis points in some cases.
At the moment Sri Lanka is getting new disbursements from the Extended Fund Facility after the currency crisis and default triggered by 2020 rate cuts and is steadily repaying the loan taken after the currency crisis triggered by 2015 rate cuts.
Sri Lanka is now getting the RFI after a controversial rate cut in May, though inflationary open market operations (monetizing bank rupee assets) have not been deployed in 2025 to enforce it and rates are correcting upwards.
- https://economynext.com/sri-lanka-t...emergency-imf-loan-base-rate-3-27-pct-254112/
Economist warns IMF RFI too costly for Sri Lanka
- Argues IMF RFI financing effective rate exceeds 6% and time-based surcharges add further 2.75% after three years
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