Sri Lanka and the International Monetary Fund (IMF) on Wednesday, reached a preliminary agreement on an emergency loan to the crisis-hit country.

The debt-laden island nation had sought up to three billion dollars from the global lender as it struggles with its worst economic crisis in more than seven decades.

Sri Lankans have faced acute shortages of basic goods and sky-high prices for months.

According to the sources, who declined to be named ahead of an official announcement, did not say how much money Sri Lanka might get.

The IMF said a visiting team that arrived a week ago had extended its stay by a day and would address a news conference at the central bank on Thursday morning.

“The IMF Mission in Colombo has been extended by one day because discussions are still ongoing with the authorities,” it said in a statement.

Spokespersons for the Sri Lankan government did not respond to requests for comment.

Presenting an interim budget for the rest of the year, Sri Lankan President, Ranil Wickremesinghe told parliament on Tuesday that talks with the IMF had reached the “final stage”.

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Staff-level agreements are typically subject to the approval of the IMF management and its executive board, after which the recipient nations get access to funds.

The IMF team held talks with Sri Lankan government officials, including the treasury secretary on Tuesday to address concerns on the political front, the sources said.

Most of the technical details had been agreed to beforehand.

Sri Lankan shares (.CSE) jumped 2.6 per cent on news of the preliminary loan pact, their best session since Aug. 12. August has been the best month for the shares since January 2021.

Sri Lanka sovereign bond prices rose 3.7 cents on the dollar. The country’s notes maturing in 2026 and 2028, which are trading at distress levels, are leading the latest gains.

(Reuters/NAN)