By Chandeepa Wettasinghe
Finance Minister Ravi Karunanayake returned to the island from Washington on Friday with “a bag full of cash”, following successful talks with the International Monetary Fund Managing Director Christine Lagarde.
“We got a facility to cover all our needs,” Karunanayake told MirrorBusiness. He said this was leveraged through a financially disciplined government which has come into play.
“The abundance of confidence in the new government helped us to overcome some of the major problems that we have; and that was the depleted revenue reserves that we have,” he said.The new regime is seeking foreign development funding to restructure the short-term high-interest commercial lending the previous regime opted for from China. According to the Central Bank, most of these loans are set to mature before 2020.
Sri Lanka previously availed itself of a Rs. 2.6 billion IMF standby credit facility in 2009, and according to rumours, the new regime was seeking a similar arrangement between Rs.2.5-4 billion during Karunayake’s overseas visit.
“It’s good to see bags full of cash coming into the country, because in the past, bags full of cash only went out,” Policy Planning and Economic Affairs Deputy Minister Harsha de Silva said in a lighter vein.News reports said that the government had requested IMF for a deferment of repayments on an earlier loan and had received positive replies. Therefore the exact structure of the relief cannot be fully determined.
Karunanayake was unwilling to disclose the exact amount which was agreed upon.“You’ll have t o wait and see until they come here next week,” he added on Friday on the side-lines of the Institute of Chartered Shipbrokers Annual Awards Ceremony. IMF Post-Program Monitoring Chief Todd Schneider and IMF Asia and Pacific Department Director Changyong Rhee will be arriving in Sri Lanka today for a regularly scheduled mission.
According to a joint statement by Lagarde and Karunanayake, I MF technical assistance missions focused on tax policy and administration, public financial management, and financial sector supervision are to follow in the coming months, and the dialogue will continue at the Spring Meetings of the IMF and the World Bank in April. Meanwhile the government has been gearing up to attract further borrowings worth up to Rs.1.5 billion, also to restructure existing loans.