IMF urges Sri Lanka to tighten monetary policy, raise tax to address debt woes

FILE PHOTO: Demonstrators shout slogans against Sri Lanka's President Gotabaya Rajapaksa, near the Presidential Secretariat, amid the country's economic crisis, in Colombo, Sri Lanka, April 23, 2022. REUTERS/Navesh Chitrakar/File Photo

(Reuters) - Sri Lanka must tighten monetary policy, raise tax and adopt flexible exchange rates to address its debt crisis, a senior International Monetary Fund (IMF) official said on Tuesday.

The country of 22 million people has requested loans from the IMF as it struggles to pay for imports amid crushing debt and a sharp drop in foreign exchange reserves that has fueled soaring inflation.