IMF to talk to Sri Lanka on $1.9 bn loan

Colombo, March 22: An International Monetary Fund (IMF) team is to hold talks with Sri Lanka Sunday and finalise its request for a $1.9 billion standby loan to prop up the country’s dwindling foreign exchange reserves, media reports here said.
Responding to reports that conditions may be attached to the IMF loan, a Central Bank official said that there had ‘so far been no talks on conditions’.

‘The IMF wants to help. But the conditions normally attached to standby facilities in the past are unlikely to be enforced (because of the global crisis),’ Sunday Times quoted an unnamed bank official as saying.

Reports quoting latest data from Central Bank said that private remittances in January ‘fell – on an annual basis – by 6.6 percent to $256 million while foreign exchange reserves in January were sufficient only to meet 1.3 months of imports’.

Economists and the private sector have welcomed the proposed IMF loan facility, but expressed fears that some tough conditions would be attached for the release of loan fund.

However, Deputy Finance Minister Sarath Amunugama told the state-run Sunday Observer that Sri Lanka did not ‘anticipate any difficult conditions’ from the IMF.