Sri Lanka will seek eligibility for International Development Association (IDA) loans while remaining a middle-income country, the President’s Media Division (PMD) said today.
The PMD said that the government has stated that Sri Lanka will remain a middle-income country.
Sri Lanka no longer qualifies for International Bank for Reconstruction and Development (IBRD) loans due to a downgrade of the country’s credit rating.
Therefore, the Cabinet approved a proposal yesterday (10) to request the World Bank to grant the country eligibility to obtain loans offered by the International Development Association (IDA).
This is with the aim of obtaining concessionary funding from the International Development Association (IDA), an arm of the World Bank that helps the world’s vulnerable countries. This facility is called “Gap”.
Twelve countries including Indonesia have availed themselves of this facility when they were facing an economic downturn similar to Sri Lanka.
The PMD added that the Government is pursuing a “reverse graduation” policy for a limited period of time.
The clarification comes after earlier today Cabinet Spokesman Minister Bandula Gunawardena told the media that Cabinet approval has been received for Sri Lanka to be downgraded to a low-income country.
Minister Gunawardena said that World Organizations have informed the Finance Minister to downgrade Sri Lanka to a low-income country due to the worsening economic crisis and for easy access to financial assistance.
He said this will allow Sri Lanka to facilitate future loans and concessions and provide easy access for international institutions helping poor and vulnerable nations. (NewsWire)