No conditions stipulated in IMF loan - Prof. Peiris

Dharma Sri ABEYRATNE

No conditions which are contradictory to Government policies or go against the Mahinda Chinthana had been stipulated by the International Monetary Fund (IMF) when the Government entered into an agreement with the IMF, Minister of Export Development and Internal Trade Prof. G. L. Peiris said yesterday.

The Minister said that there are no conditions which clash with the policy of the Government as the Opposition has raised a hue and cry about hidden conditions prevailing in the IMF loan agreement.

The IMF executive committee will hold a session today to finalise the loan.

Though Sri Lanka applied for a loan of US $ 1.9 billion, the IMF has pledged to grant a loan amounting to US $ 2.5 billion. “The US $ 1.9 billion which Sri Lanka applied for, equals 300 percent of the country’s quota, but the IMF has decided to grant US $ 2.5 billion which represents 400 percent of the country’s quota. The IMF is satisfied with Sri Lanka’s ongoing development and welfare activities,” Minister Peiris said.

This is the largest amount which the country received in its history.

The loan will be granted in eight equal instalments, starting from today and the last instalment is scheduled to be granted on March 15, 2011. The IMF will grant USD 312 million (UDR 206 million) for each instalment. The interest rate of the loan would be 0.5 percent which is comparatively low. As a result of the well balanced financial discipline of the country, inflation has dropped to 2 percent today from 28 percent reported in July, last year, the Minister said.