The International Monetary Fund will provide $2.9 billion over four years to rescue Sri Lanka from its worst financial crisis under a preliminary agreement.
This will work to restore financial and macroeconomic stability and debt sustainability as well as unlock the country's growth potential, the IMF team is visiting Sri Lanka.
"Debt relief from Sri Lanka's creditors and additional financing from multilateral partners will help ensure debt stability and close financing gaps,"
Sri Lanka is in the midst of an unprecedented economic crisis, with shortages of essential commodities such as fuel, medicine and cooking gas due to severe foreign exchange shortages.
The country's total external debt is over $51 billion, of which $28 billion is due by 2028.
Sri Lanka's economy is expected to contract by 8.7% in 2022 and inflation will rise by more than 60%, the IMF said, hitting the poor and vulnerable.