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Wednesday February 1st, 2023

Sri Lanka seeks technical support from IMF: Basil

ECONOMYNEXT – Sri Lanka has sought technical support from the International Monetary Fund and a mission is likely to arrive, Finance Minister Basil Rajapaksa said.

“We have not officially done anything,” he told reporters at a forum in Colombo Wednesday when asked whether a decision has been made to go for an IMF program.

“But we have written to them and sought specialist advice from them. The IMF is an international institution set up to give advice to countries that are going through crisis situations.

“We also need funds. Japan has agreed to give money.

“So one of these days they will come and give us advice about things that we do not know. Whether we take the advice is not something I can do alone. Before we go there we need to know what they give. We get specialist knowledge and are looking to find out what is the suitable system for this country. Before we go to any bank to get a housing loan also we need to know.”

He did not elaborate on the mission.

Central Bank Governor Nivard Cabraal said in a twitter.com message Thursday morning that it was a technical assistance mission (TA) mission.

An IMF team was in Sri Lanka recently for annual Article IV consultations which had been delayed.

Sri Lanka officials have previously said they had the IMF as an option and was trying other methods to solve the external problem as Washington based lender would request a currency depreciation and spending cuts.

Several cabinet ministers have said publicly that Sri Lanka should consider going for an International Monetary Fund program as forex shortages disrupted supplies of various goods.

There has been a softening of attitude towards the IMF among ruling party politicians in recent weeks. Minister Dullas Alahapperuma last months said IMF should not be demonized as it had helped the country in the past.

The matter had been discussed at the cabinet on several occasions.

Sri Lanka’s foreign reserves have fallen sharply due to liquidity injections made to keep interest rates down as economic activity recovered.

Sri Lanka’s imports are soaring amid a large budget deficit and recovering private credit. (Colombo/Feb02/2022)

Comments (2)

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  1. Xavier Fernando says:

    IMF just responded with one line – “Fire incompetent monkeys and get intelligent humans, to run the country”

  2. John FERNANDO Fernando says:

    crooks dont like to borrow from imf so they to have account for it cant steal

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  1. Xavier Fernando says:

    IMF just responded with one line – “Fire incompetent monkeys and get intelligent humans, to run the country”

  2. John FERNANDO Fernando says:

    crooks dont like to borrow from imf so they to have account for it cant steal

Sri Lanka bond yields down at close

ECONOMYNEXT – Sri Lanka’s bond yields were down at close following a bond auction on Wednesday, dealers said while a guidance peg for interbank transactions remained unchanged.

“The rates were steady at the auction,” a dealer said.

“This can be a signal to the market saying the rates will go down in the future.”

A bond maturing on 01.07.2025 closed at 32.40/60 percent, down from yesterday’s 32.60/85 percent.

A bond maturing on 01.05.2027 closed at 29.10/35 marginally down from yesterday’s 29.20/75 percent.

The Central Bank’s guidance peg for interbank US dollar transactions remained unchanged at 362.14 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 371.38 rupees on Friday, data showed. (Colombo/Feb 01/2022)

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Sri Lanka bill auction hits pothole after 2025 bond spike

ECONOMYNEXT – Sri Lanka sold only 45 billion rupees in Treasury bills at Wednesday’s auction after offering 120 billion rupees, data from the state debt office showed, amid market confusion over a spike in a two year bond at an earlier action.

30.1 billion rupees of 3-month bills were sold at 29.91 percent, unchanged from a week earlier after offering 60 billion rupees for auction.

5.1 billion rupees of 6-month bills were sold at 28.72 percent, flat after offering 30 billion.

10.3 billion rupees of 12-month bills were sold at 27.72 percent after offering 30 billion.

Phase II subscriptions have been opened.

The market was foxed after the 2025 bonds were accepted at sharply higher yield than market on January 30, dealer said.

There was further confusion as the there was an outright purchase of 2025 at around 29 percent earlier in January.

Some investors speculated that the authorities were trying to drive more buyers towards short end bonds as bill volumes were getting larger. (Colombo/Feb01/2023)

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Sri Lanka services exports down 5.9-pct in 2022

ECONOMYNEXT – Sri Lanka’s services exports were estimated to have fallen 5.9 percent to 1,876.3 million US dollars, the island’s Export Development Board said.

Services exports estimated is made up of ICT/BPM, construction, financial services, transport and logistics.

There are more than 500 ICT companies, the EDB said.

Sri Lanka’s merchandise exports were up 4.6 percent to US dollars 13.1 billion dollars in 2022 from 2021.

Sri Lanka’s goods exports are slowing amid lower growth in Western markets. (Colombo/ Feb 01/2023)

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