The Sri Lankan government's negotiations with the IMF for a bailout package have made "good progress," the Central Bank Governor said on Thursday, indicating that a top delegation of the Washington-based lender is expected to arrive here at the end of this month to chalk out a staff-level agreement.

Sri Lanka is in the midst of an unprecedented economic crisis that has led to severe shortages of fuel and other essentials.

The island nation of 22 million also witnessed a major political churn in recent times following massive mass protests that forced former president Gotabaya Rajapaksa to flee the country and resign from his post.

"The IMF programme is making a good progress, and an IMF mission is planning to visit Sri Lanka towards the end of this month to reach a staff-level agreement on a policy package,” said Sri Lanka's Central Bank Governor Nandalal Weerasinghe.

Debt restructuring

Weerasinghe said that after Sri Lanka reaches a staff-level agreement with the IMF, the country will have to engage with its creditors on debt restructuring, the report said.

"We will be reaching out to the bilateral and commercial creditors once we reach the overall debt targets and the staff-level agreement," he said.

In July, Rajapaksa's ally and Sri Lanka's newly-appointed president Ranil Wickremesinghe said he had aimed to reach an agreement with the IMF by early August, but the political turmoil in the country forced the international lender to push back the agreement by a month.

Wickremesinghe was elected Sri Lanka's eighth president last month after his predecessor Rajapaksa fled to Singapore after irate protesters stormed his official residence and occupied key government buildings.

On July 9, in remarkable scenes of a country in meltdown, anti-government protesters also set Wickremesinghe's private residence at Cambridge Place here on fire.

Foreign debt

Sri Lanka needs about $5 billion in the next six months to cover basic necessities for its citizens, who have been struggling with long queues, worsening shortages of essentials and frequent power cuts.

The island nation owes $51 billion in foreign debt, of which $28 billion must be paid by 2027.

The country's inflation surged to 60.8 per cent in July, up from 54.6 per cent in June, the crisis-hit country's statistics department Colombo Consumer Price Index has said, as food and fuel remained scarce amid dwindling foreign exchange reserves.