(Reuters) - Sri Lanka must tighten monetary policy, raise tax and adopt flexible exchange rates to address its debt crisis, a senior International Monetary Fund (IMF) official said on Tuesday. The country of 22 million people has requested loans from the IMF as it struggles to pay for imports amid crushing debt and a sharp drop in foreign exchange reserves that has fueled soaring inflation. "The requirement for fund lending will be progress toward debt sustainability," Gulde-Wolf said, calling on Sri Lanka for measures to increase tax revenues to address critical spending needs. "Monetary policy has to be tightened to keep inflation in check," she said. Gulde-Wolf did not reply to a question on the total value for any IMF package, nor the estimated timing of a conclusion to the negotiations with Sri Lanka.
