The International Monetary Fund on Thursday agreed to give a $2.9 billion (over Rs 23,000 crore) loan to Sri Lanka, which is facing its worst-ever economic crisis.

In a statement, the global lender said it will offer the loan to Sri Lanka for a period of four years under its Extended Fund Facility programme.

“The new EFF [Extended Fund Facility] arrangement will support Sri Lanka’s program to restore macroeconomic stability and debt sustainability, while safeguarding financial stability, reducing corruption vulnerabilities and unlocking Sri Lanka’s growth potential,” the International Monetary Fund said.

However, the loan agreement is subject to approval by the management and executive board of the International Monetary Fund. Sri Lankan authorities will also have to follow through on previously agreed measures to be able to avail the loan.

Sri Lanka, a country of 2.2 crore people, has run out of foreign exchange reserves limiting essential imports of fuel, food and medicine since March. The island nation’s inflation rate touched 64.3% on a year-on-year basis in August, while food inflation shot up to 93.7%, according to Bloomberg.

The economic crisis triggered a wave of protests across the country. Demonstrators stormed official buildings, forcing Sri Lankan President Gotabaya Rajapaksa to flee from the country and resign from his post in July.

Ranil Wickremesinghe was appointed as the new president on July 21 and Dinesh Gunawardena was sworn in as the prime minister a day later.

The economic meltdown also led to Sri Lanka defaulting on its $51-billion (over Rs 4 lakh crore) foreign debt in April.

On Thursday, the International Monetary Fund said that its programme will aim to raise government revenue to support fiscal consolidation and introduce new pricing for fuel and electricity. The economic body also said it will hike social spending, bolster central bank autonomy and rebuild Sri Lanka’s depleted foreign reserves.

Also read: No fuel, no hope: Thousands of Sri Lankans are fleeing the country in mass brain drain