COLOMBO: To address its chronic debt crisis, an official from the International Monetary Fund (IMF) recommended Sri Lanka to tighten its monetary policy, hike taxes, and adopt flexible exchange rates on Tuesday.

"We've had really good, successful technical discussions on preparations for the negotiations with authorities over the last weekend and a few days before," Anne-Marie Gulde-Wolf, interim director of the International Monetary Fund’s Asia and Pacific Department, said at an online event, according to media state media reports.

Ali Sabry, the Finance Minister, and Nandalal Weerasinghe, the Governor of the Sri Lankan Central Bank, just returned from a visit to the IMF to discuss financial assistance for the country.

"Progress toward debt sustainability will be a prerequisite for fund financing. To keep inflation under control, monetary policy must be tightened. We believe that flexible exchange rates are necessary "she stated.

Gulde-Wolf refused to say how much any IMF package would cost or how long it would take to reach an agreement with Sri Lanka.

Sri Lanka had already halted payments on its external debt. 

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