MoF mistaken on IMF loan surcharge

Fact Check

In late 2025, Sri Lanka received additional IMF financing under the Rapid Financing Instrument (RFI) following Cyclone Ditwah. Against this backdrop, in a formal investor presentation dated 11 February 2026, the Ministry of Finance (MoF) responded to a public question on whether Sri Lanka would have to pay surcharges on the IMF RFI loan. In response, they stated that IMF surcharges “are not automatic” and arise “only if outstanding IMF credit exceeds quota-based thresholds for an extended period”.

To verify this claim, FactCheck.lk reviewed the IMF’s Frequently Asked Questions on the Fund’s Charges and the Surcharge Policy and IMF Country Report No. 25/339.

IMF lending can attract two different surcharges.

The first, and the largest, surcharge is a level-based surcharge of 2 percentage points. This applies immediately when a country’s outstanding credit to the IMF exceeds 300% of its quota. This surcharge has no waiting period; it applies automatically and immediately once the threshold is crossed.

According to the IMF Country Report, once the RFI loan of USD 206 million was disbursed, Sri Lanka exceeded the 300% quota and thereby became liable to this level-based surcharge immediately on the portion that exceeded that 300% level.

The second surcharge is a time-based of an additional 0.75 percentage points. This applies similarly to the level-based surcharge, but only when outstanding credit remains above 300% of quota for a sustained period—typically 36 or 51 months, depending on the lending facility.

The response given by the MOF on the IMF surcharges claims that “they” (plural, referring to both surcharges) arise only if credit exceeds quota-based thresholds for an extended period. This claim is incorrect because the higher level-based surcharge applies immediately upon crossing the quota-based threshold, as was the case for Sri Lanka when the RFI loan was disbursed.

Therefore, we classify this statement as FALSE.

*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, FactCheck.lk will revisit the assessment if new information becomes available.

Additional note: Once the 300% quota was exceeded, following the disbursement of RFI loan, all subsequent IMF loan disbursements (including in the current IMF program) are now subject to the additional 2% level-based surcharge. This surcharge, on loan disbursements in the current program, would have applied in any case upon exceeding the 300% threshold, even without the RFI.