IMF says talks with Sri Lanka 'interrupted' by unrest

The IMF hopes unrest in Sri Lanka will be resolved soon so that aid talks that were interrupted can resume, a fund spokesman said Thursday.

Formal discussions on a new loan program for the cash-strapped nation began last month but were thrown off course by the political upheaval that led to the resignation of the country's president.

"We are, of course, deeply concerned about the ongoing crisis of impact on the Sri Lankan people and particularly the poor and the vulnerable groups," IMF spokesman Gerry Rice told reporters.

Following constructive early talks, "clearly the political and the social emergency situation... has interrupted those discussions," he said.

The international crisis lender is "closely monitoring" developments there, and "we hope for a resolution of the current situation that would allow for our resumption of a dialogue on an IMF-supported program," Rice said.

The upheaval forced now ex-president Gotabaya Rajapaksa to flee the country, amid dramatic scenes of protesters occupying the presidential palace.

Rajapaksa is accused of mismanaging the island nation's economy to a point where it has run out of foreign exchange to finance even the most essential imports, leading to severe hardships for its 22 million people, with four out of five Sri Lankans skipping meals.

Sri Lanka defaulted on its $51-billion foreign debt in April and has nearly exhausted its already scarce supplies of petrol, with the government ordering the closure of non-essential offices and schools to reduce commuting and save fuel.

Rice said the IMF remains in contact with technical officials in Colombo, at the finance ministry and central bank, but as with any aid deal, a loan program for Sri Lanka "would require adequate assurances on debt sustainability."