September targets achieved

IMF - Stand-by Arrangement:

The key targets and structural benchmarks as agreed with the IMF as at end September 2009 were comfortably achieved by the Sri Lankan authorities, said a Central Bank of Sri Lanka media release.

The Net International Reserves (NIR) target was well exceeded with gross official reserves rising to US dollars 4.2 billion (equivalent to 4.7 months of imports) by end September 2009. Reserve money was maintained within the targeted level of Rs. 280.4 billion, while Net Domestic Financing (NDF) at Rs.302.5 billion was below the ceiling of Rs.305 billion.

This follows the successful achievement of the targets set for July 2009 as well, the release said.

The improvements in the key macroeconomic indicators observed since the end of the conflict and the approval of the Standby Arrangement, continued. Inflation continued its downward trend and market interest rates declined further.

Yield rates on Treasury Bills continued to decline with the 91 day rate reaching below 10 percent by end September 2009. A marked reduction in relatively long term Treasury bond yield rates was also observed. Meanwhile, market capitalization in the Colombo Stock Exchange exceeded Rs one trillion on October 6, and average turnover has been at an all time high.