The International Monetary Fund said late on Sunday it had reached a staff-level agreement with Sri Lanka on the seventh review under its Extended Fund Facility, unlocking financing of about $345 million.

The deal needs approval from the IMF executive board and hinges on the presentation of the 2027 budget to parliament next month, in line with programme provisions, and completion of a review of financing assurances. Upon board approval, Sri Lanka would access SDR 254 million, taking total disbursed funds under the arrangement to about $2.7 billion of the $3 billion programme approved in March 2023.

IMF Mission Chief Evan Papageorgiou said the economy grew 4.2 per cent in the second quarter of 2026, marking eleven consecutive quarters of growth, with reserves at $6.9 billion at end-August. The Fund flagged downside risks from the Middle East conflict, global trade uncertainty and the El Nino weather phenomenon.