WASHINGTON: The International Monetary Fund on Tuesday said Sri Lanka has secured financing assurances from all major bilateral creditors, paving the way for the IMF board to consider approval of a long-awaited $2.9 billion four-year bailout agreed last year.

The IMF said its board will meet on March 20 to review a preliminary staff-level agreement first signed in September, offering a lifeline to the South Asian country which faces its worst financial crisis since independence from Britain in 1948. Approval is expected since the board generally will not add items to its agenda unless its members are ready to act.

“Sri Lanka has now received financing assurances from all major bilateral creditors,” Krishna Srinivasan, director of the IMF’s Asia and Pacific Department (APD) said in a statement.

“This paves the way for consideration by the IMF’s Board on March 20 the approval of the Staff Level Agreement reached on September 1, 2022 for financing under an Extended Fund Facility,” Srinivasan added.

A source familiar with the matter said China had agreed on Monday to back Sri Lanka’s debt restructuring with stronger financial assurances, allowing the IMF to move forward.

The announcement comes days after the IMF praised Sri Lanka’s surprise decision on March 3 to raise interest rates and move toward a market-determined exchange rate as evidence of a commitment to reducing inflation and enacting reforms.

Sri Lanka, which has been facing shortages of food, fuel and medicines, has been waiting for more than 180 days for approval of the IMF loan, mostly due to IMF concerns over the quality of the initial financing assurances offered by China and other bilateral creditors, and its insistence on painful reforms.

Central bank Governor P. Nandalal Weerasinghe said last week that Sri Lanka had fulfilled its conditions with the rate hike and he was hopeful the IMF bailout would be approved this month. The IMF said the board’s approval of a new loan for Sri Lanka would help catalyze financing from other creditors, including the World Bank and the Asian Development Bank.