Sri Lanka's request for a $2.9-billion bailout was approved by the International Monetary Fund (IMF) on Monday, the South Asian nation's President Ranil Wickremesinghe announced.

"We are pleased that the IMF Executive Board approved our program, enabling Sri Lanka to access up to $7.0 billion in funding from the IMF and International financial institutions," he said.

A spokesperson for Wickremesinghe told Agence France-Presse (AFP) in Colombo that he was informed of the much-awaited executive board's decision before the Washington-based lender was due to make a formal announcement.

"I express my gratitude to the IMF and our international partners for their support as we look to get the economy back on track for the long term through prudent fiscal management and our ambitious reform agenda," Wickremesinghe said.

The government has already doubled taxes, increased energy tariffs threefold and slashed subsidies in an effort to meet the preconditions of the IMF bailout.

The austerity measures have sparked widespread protests and led to strikes that crippled the health and logistics sectors last week. Wickremesinghe has said he had no alternative but to go with an IMF program.

The economic crisis since late 2021 led to mass protests which saw the toppling of Wickremesinghe's predecessor, Gotabaya Rajapaksa, in July.

The former president fled the country and resigned three months after the country defaulted on its $46 billion external debt when it run out of cash to finance even the most essential imports.

Earlier in the day, Wickremesinghe's office said he was seeking a 10-year moratorium on Sri Lanka's foreign debt as the country was out of foreign reserves to service its loans.

Sri Lanka's economy shrank by a record 7.8% last year as it grappled with its worst foreign exchange crisis since independence from Britain in 1948.