Washington [US], March 21 (ANI): Of the total USD 3 billion International Monetary Fund (IMF) approved fund for Sri Lanka, the economic crisis-hit country will immediately receive an initial disbursement of about USD 330 million, IMF Executive Board said.

On Monday, the IMF Executive Board approved a 48-month extended arrangement under the Extended Fund Facility of USD 3 billion to support Sri Lanka's economic policies and reforms.

Sri Lanka has been facing a severe economic crisis as a result of past policy missteps and economic shocks.

"We have been deeply concerned about the impact of the crisis on the Sri Lankan people, particularly the poor and vulnerable groups, and about the economic costs of the delay in the country's access to external financing," IMF said, adding this fund arrangement approval marks an important step towards the resolution of the crisis in the island nation.

IMF said it is now important for the Sri Lankan authorities and creditors to closely coordinate and make swift progress towards a debt treatment that restores debt sustainability under the IMF's Extended Fund Facility-supported program.

The fund approval, IMF said, is expected to catalyze new external financing, including from the Asian Development Bank and the World Bank.

"Commendably, Sri Lanka has already started implementing these challenging policy actions," it said.

IMF further said it is now essential for Sri Lanka to continue the reform momentum by the authorities and the Sri Lankan people more broadly.

"The economic impact of the reforms on the poor and vulnerable needs to be mitigated with appropriate measures. In this regard, we welcome the authorities' firm commitment to strengthen social safety nets, including through a minimum spending floor, well-targeted spending through a new Social Registry, and establishment of objective eligibility criteria.""Efforts to increase tax revenues should be pursued in a growth-friendly manner while protecting the poor and most vulnerable."Sri Lanka's public debt, at 128 per cent of GDP as of end-2022, is unsustainable, according to IMF. (ANI)