IMF USD 2.6 billion Stand by Agreement:

Sri Lanka to receive first tranche today

Anjana Samarasinghe

Central Bank Governor of Sri Lanka Ajith Cabraal said that IMF will credit Rs USD 332 million to the central bank account today as the first disbursement of the USD 2.6 billion SBA Facility which was a approved by the Executive Board of the IMF last Friday to support country’s Balance of Payments (BOP).

Sri Lanka to receive USD 332 million from International Monetary Fund (IMF) as the first disbursement of the USD 2.6 billion Stand-By Arrangement (SBA) Facility today.

Central Bank Governor of Sri Lanka Ajith Cabraal said that IMF will credit Rs USD 332 million to the central bank account today as the first disbursement of the USD 2.6 billion SBA Facility which was a approved by the Executive Board of the IMF last Friday to support country’s Balance of Payments (BOP).

The remaining amount will be disbursed in seven tranches subject to the quarterly reviews on economic performance of the country.

The country will receive the next disbursement in September and other one in end of September. Under the 20-month SBA Program, the final tranche will be disbursed in March 2011. Cabraal said that the endorsement of the country’s economic policies by the IMF will boost the confidence of the foreign investors and other donor and funding agenises in the world.

With this IMF SBA facility many funding agencies has come forward to assist Sri Lanka, he said. Explaining the reasons for applying for SBA facility Governor said that till August 2008 Sri Lankan economy had over 6 percent growth and country had a USD 3557 million of foreign reserves. Foreigners heavily invest on Government Treasury Bills and Bonds and unemployment rate declined further.

There was no need of an IMF SBA Facility during this period. However by the end of 2008 with the global economic crisis there were unfavourable pressure on the country’s BOP and led to a to a substantial decline in external reserves. We thought it is right move to go for IMF SBA facility to support country’s BOP and strengthen the foreign reserves, he said.

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