UK Foreign Secretary's 'utterances':
Central Bank expresses distress
The Central Bank of Sri Lanka is deeply distressed by the recent
media reports where the United Kingdom, Foreign Secretary David Miliband,
is supposed to have "raised doubts about whether Colombo could be
trusted to use a US$ 1.9 billion loan from the IMF appropriately".
For purposes of record, the Central Bank wishes to state that during
the past 25 years, the IMF has granted nine loans to the Central Bank of
Sri Lanka and the Bank has utilized all such IMF facilities very
honourably in strict compliance with the terms of disbursement, and
repaid such facilities without a single default. In fact, Sri Lanka has
never delayed or defaulted on any loan, and consequently, has maintained
an unblemished record of debt servicing.
In that context, Miliband's alleged statement is very unfortunate and
disturbing, since it casts a slur on the impeccable debt servicing
record of the Central Bank of Sri Lanka, as well as Sri Lanka's deep
commitment to meeting its obligations.
Media reports also indicate that Miliband has stated that the
Government of Sri Lanka should be "able to show that it will use any IMF
money in a responsible and appropriate way", and that he "does not think
that's yet the case". This comment too, while being unfortunate,
displays lack of basic knowledge, since IMF facilities are made
available only to monetary authorities/central banks for balance of
payment
support purposes, and hence the contention that the Government would
utilize IMF money does not arise.
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