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IMF releases US$ 60 million

by Ravi Ladduwahetty

The Executive Board of the Washington-based International Monetary Fund (IMF) yesterday released a further US$ 60 million (Rs. 5.7 billion/ Special Drawing Rights 48.3 million) to Sri Lanka under a 14 month Standby Arrangement, bringing the total disbursements to US$ 190 million (SDR 151.7 million) to Sri Lanka under the IMF supported program.

The IMF will also support the policies enshrined in the 2002 Budget, which if implemented and backed by prudent monetary policy, will go a long way to address micro-economic imbalances. The Fund in particular welcomes the focus in the reform of the tax system and administration and the steps taken to rationalise expenditure.

IMF Senior Resident Representative in Colombo Dr. Nadeem Ul Haque told the Daily News yesterday that the negotiations of the IMF Board of Directors with the three member Sri Lanka team went very well and that they approved the release of the funds as they were very happy about the progress in Sri Lanka. They are awaiting the implementation of the progress, he said.

The three member Sri Lankan team to the Washington negotiations comprised: Treasury Secretary Charitha Ratwatte, Central Bank Governor A. S. Jayawardena and the Central Bank's Director of Fiscal Policy and Economic Affairs Mrs. Rose Cooray.

These funds will be for assisting the Government in the management of foreign exchange reserves and also for assisting in international trading and business.

This follows the Government renegotiating the Standby Agreement with the IMF, which has been entered into by the previous regime in June last year. The Standby Agreement was renegotiated between IMF's Review Mission headed by Area Manager Jeremy Carter, Prime Minister Ranil Wickremesinghe and Finance Minister K. N. 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 have already been submitted to the IMF Executive Board in Washington for 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 represented the Government in Washington for the formalisation of the new arrangement.

The latest financial arrangement for the standby facility as at February 28 this year was SDR 103 million which 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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