Sri Lanka to discuss enhanced IMF facility of up to US4.0bn
COLOMBO (EconomyNext) – Sri Lanka will initiate talks on an enhanced facility with the International Monetary Fund to shore up the balance of payments, with a high level team flying out to Washington, Finance Minister Ravi Karunanayake said.
Sources say an enhanced facility of up to 4.0 billion dollar may be on the cards. Sri Lanka was last given a 2.5 billion US dollar facility in 2009, but a part of it has been paid down. Sri Lanka’s foreign reserves have been falling partly due the loan repayments.
"There is a lot of international goodwill and we can get finance from the IMF and World Bank a 0.5 percent," Karunanayake told reporters in Colombo.
Funding from other sources were much more expensive, he said.
Sri Lanka may not necessarily use the IMF facility, he said, but IMF only gave balance of payments support. An IMF loan, which helps boost foreign reserves can release more domestic credit for the government to borrow for fiscal needs.
Karunanayake told reporter in Colombo that he would "love to have and enhanced facility" but it has to be on the government’s own terms.
He said the government wanted to restructure expensive finance taken from bi-lateral donors.
He and Central Bank Governor Arjuna Mahendran would be visiting Washington for discussions with the IMF and World Bank.