IMF executive board releases US $ 1.5bn loan for Sri Lanka

The executive board of the International Monetary Fund (IMF) last week gave its approval for the negotiated US $ 1.5 billion (1.1bn special drawing rights) three-year Extended Fund Facility (EFF) for Sri Lanka, which is designed to address “serious medium-term balance of payments problems because of structural weaknesses”, and comes under, “specific conditionality”.

“This amount is equivalent to 185 percent of the country’s current quota with the IMF,” which is above the normal limit of 145 percent; hence is a facility that has been approved under “exceptional access,” to an EFF by a country, according to the IMF. While the total amount will be in six tranches, the first of such amounting to US $ 168.1 million or 119.9 million Special Drawing Rights (SDR) will be made immediately with the final tranche is expected in April 2019.

The facility will carry an interest rate equivalent the SDR interest rate which currently stands at 0.05 percent plus 100 basis points, “significantly lower than the prevailing market rates”, the IMF statement said.