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US$ 62.5 million for Sri Lanka: Government renegotiates IMF standby facility

by Ravi Ladduwahetty

The Government has renegotiated the standby agreement with the Washington based International Monetary Fund (IMF) which has been entered into by the previous regime in June last year, Finance Minister K.N. Choksy told the Daily News in an interview yesterday.

In terms of the renegotiation, the Government is expecting the Board of Directors of the IMF at its meeting in Washington next week to release to Sri Lanka US$ 62.5 million (around Rs. 5.87 billion) under the Agreement, for the immediate development projects of the Government, Minister Choksy said.

The Aggregate amount that the International Monetary Fund has agreed to grant under the soft loans was US$ 255 million (around Rs. 89.7 billion) However, only half this amount had been released to the previous Government as the agreed measures were not implemented by the previous Government, according to the Minister.

The standby Agreement had been renegotiated between IMF's Review Mission headed by Area Manager Jeremy Carter, Prime Minister Ranil Wickremesinghe and Minister Choksy.

Originally, the Agreement was due to lapse on June 19 this year but the completion date is expected to be extended by two months as the IMF is now satisfied with the present Government's commitment to expedite the program between April and June and if satisfied, would release the balance of US$ 62.5 million in June.

The mutually agreed modifications to the Standby Agreement had been concluded between the Finance Ministry and the IMF Mission and has already been submitted to the IMF Executive Board in Washington for the final approval next week.

Treasury Secretary Charitha Ratwatte, Central Bank Governor A.S. Jayawardena and Director of Fiscal Policy and Economic Affairs Mrs Rose Cooray will represent the Government in washington next week for the formalisation of the new arrangement.

The International Monetary Fund's Senior Resident Representative in Colombo Dr. Nadeem Ul Haque told the Daily News that the Fund's Board was taking up the matter next week and that it was a matter of time that it should be approved.

These funds will be for assisting the government in the management of foreign exchange reserves and also for assisting in international trading and business, he said.

The latest financial arrangement for the standby facility as at February 28 this year was SDR million 103 had been drawn out of an approved SDR 200 million. The approved date was April 20, 2001 and the expiry date was to be June 19, 2002.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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