It also said the IMF's first review enables the immediate disbursement of an amount equivalent to SDR 206.7 million (about US$329.4 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 413.4 million (about US$658.8 million).

“Sri Lanka’s performance under the Stand-by Arrangement is encouraging. Recent economic developments have been stronger than expected, and the near-term outlook has improved while the Fund-supported programme had helped Sri Lanka avoid a balance of payments crisis", said Mr. Takatoshi Kato, Deputy Managing Director and Acting Chair following the Executive Board's discussion on Sri Lanka.

The authorities have made good progress on financial sector reform, notably the amendment to the Banking Act to improve the bank resolution framework. While the rise in non-performing loans is a concern, banks maintain relatively healthy capital positions, mitigating the risk that this poses to the financial sector as a whole, he stated.