The International Monetary Fund (IMF) headquarters building in Washington.

The International Monetary Fund (IMF) said on Tuesday that it is monitoring political and economic developments in Sri Lanka "very closely" as public unrest in the island nation grows amid its worst economic crisis in decades.

Sri Lanka's parliament will meet on Tuesday after President Gotabaya Rajapaksa dissolved his cabinet and sought to form a unity government to find a way out of the island nation's worst economic crisis in decades and quell public anger.

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Sri Lanka opposition rejects unity offer, demands president resign

Troubled Sri Lanka set for new cabinet and protests

Rajapaksa on Monday dissolved the cabinet and appointed a new finance minister, while also seeking a new central bank governor.

Sri Lanka President Gotabaya Rajapaksa speaks during an event. File photo

"IMF staff is looking forward to program discussions with the authorities, including during the visit of the newly appointed Finance Minister to Washington later this month," IMF Sri Lanka mission chief Masahiro Nozaki told Reuters in an emailed statement.

The country of 22 million people has been suffering from a shortages of food, fuel and prolonged power cuts lasting up to 13 hours, triggered by a lack of foreign exchange that has stalled imports.

Opposition parties and even members of Rajapaksa's ruling alliance rejected the move for a unity government, setting the stage for a test of strength in parliament.

"You could see the composition of parliament changing today," said lawyer Luwie Niranjan Ganeshanathan, who specialises in constitutional issues.