The World Bank has agreed to provide Sri Lanka with $600 million in financial assistance to help meet payment requirements for essential imports, the Sri Lankan president’s media division said in a statement on Tuesday.
“The World Bank has agreed to provide $600 million in financial assistance to address the current economic crisis,” the statement said.
The World Bank will release $400 million “shortly”, she said.
According to the statement, the World Bank said it would continue to help Sri Lanka overcome the current economic crisis.
Sri Lanka’s worst financial crisis since independence in 1948 was caused by a drastic drop in its reserves which fell 70% over the past two years, reaching $1.93 billion at the end of March. Colombo therefore struggled to pay for basic necessities, including fuel, medicine and food.
Earlier this month, Sri Lanka launched talks with the International Monetary Fund (IMF) for financial assistance. Before the IMF finalizes a program for Sri Lanka, the country needs $3 billion to $4 billion in bridge financing to help meet its essential expenses.
The Sri Lankan government has also appealed to several countries and multilateral organizations for bridge financing until the IMF comes along.
India has helped Sri Lanka with $1.9 billion, and Colombo is in talks with New Delhi for an additional $1.5 billion to finance imports, including fuel.