IMF loan in final stages

The stand-by arrangement facility of US$ 1.9 billion which has been sought by the Central Bank of Sri Lanka from the IMF, has now reached an advanced level of finalization.

The Central Bank yesterday announced that the Sri Lankan delegation to the IMF Spring Meetings held several discussions with senior staff of the IMF.

Further, a Safeguards Assessment mission from the IMF is now in Colombo having discussions with senior officials of the Government and the Central Bank as a part of the process, the Central Bank said in a statement. The International Monetary Fund (IMF) loan is on track, but will take some time to finalize, Central Bank of Sri Lanka Governor Ajith Nivard Cabraal said.

"There are various speculations on obtaining this US$ 1.9 billion loan. However we are confident that the loan will be finalized soon," he said.

The safeguards assessments are also meant to be a mechanism to prevent possible misuse of IMF funds.

The Government having explained to the IMF as to how the intensification of global financial crises in September 2008 have adversely impacted the favourable trends in several economic indicators, relating to the external sector sought a loan of US$ 1,900 million recently. The IMF has been informed that as a result of the war against terror in Sri Lanka coming to an end shortly, there is an immediate need for a large quantum of external financing to continue with the resettlement, rehabilitation and reconstruction work in the Northern Province, and the continued rapid development of the Eastern Province.

This is an essential expenditure to uplift the living standards of the people in the areas affected by the conflict and to successfully implement the Government's efforts to bring a sustainable solution to the problem.