IMF approves US$ 251.4 mn to Lanka

2017-12-08 02:41:08

The IMF Executive Board completed the third review of Sri Lanka’s Extended Fund Facility arrangement on Wednesday (6), enabling the disbursement of US$ 251.4 million to the country.

In a statement yesterday, the IMF said the Executive Board completed the third review of Sri Lanka’s economic performance under the programme supported by a three-year extended arrangement under the Extended Fund Facility (EFF) arrangement. “Completion of the review enables the disbursement of the equivalent of approximately US$ 251.4 million, bringing the total disbursements under the arrangement to the equivalent of approx. US$ 759.9 million,” it said.

Sri Lanka’s three-year extended arrangement was approved on June 3, 2016, in the amount of about US$1.45 billion or 185 per cent of quota in the IMF at the time of approval of the arrangement.

The statement said Sri Lanka government’s reform programme, supported by the IMF, aims to reduce the fiscal deficit, rebuild foreign exchange reserves and introduce a simpler, more equitable tax system to restore macroeconomic stability and promote inclusive growth.

Following the IMF Executive Board’s discussion of the review, Mr. Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director said Sri Lanka’s performance under the Fund-supported programme has remained broadly on track since the second review.

“Macroeconomic and financial conditions have been stable, despite a series of weather-related supply shocks. The authorities remain committed to the economic reforms under the programme and have undertaken measures to improve government revenue and accumulate international reserves. Going forward, it is important to build on the progress made and accelerate reforms to further reduce fiscal and external vulnerabilities,” he said.

“Fiscal performance has been satisfactory and all targets until September were met. The new Inland Revenue (IR) Act will make the tax system more efficient and equitable, and generate resources for social and development programs. Nevertheless, Sri Lanka’s high debt burden, large gross financing needs, and weak financial performance of state-owned enterprises increases the importance of further fiscal consolidation. Timely progress in structural reforms, including tax administration and energy pricing, will support fiscal consolidation,” he said.

He also said the inflation and credit growth remain on the high side and maintaining a tightening bias for monetary policy is recommended until clear signs emerge that inflation pressures and credit expansion have subsided.

“Macroprudential tools should also be used to help rein in credit growth and head off systemic risks. While financial soundness indicators remain stable, financial sector supervision and the AML/CFT regime should be further strengthened,” he said.

Mr. Furusawa said along with efforts to deepen the foreign exchange market, it is important to further accumulate reserves and enhance exchange rate flexibility to reduce Sri Lanka’s external vulnerability. “Structural reforms are also needed to enhance competitiveness and promote inclusive growth, including measures to improve trade and investment regimes,” he said.

  Comments - 7

  • Raj Friday, 8 December 2017 07:33

    This is our acceptance of the Whites as the Master Race .

    Reply : 6       4

    cheers Friday, 8 December 2017 09:29

    This is a facility or a loan to make our bloody blood hungry politicians rich and the poor tax payers then to pay through the nose.These current govt thieves has got the appeal to rob and rob and rob further never ends and the law enforcement and the judiciary is faster asleep under yahapalanaya

    Reply : 2       1

    Saman Friday, 8 December 2017 09:29

    Raj -Western governments and people are much better at managing countries and economies than Sri Lanka would ever be.Their systems are more developed and evolved than ours.We need to shelve our pride and accept that we need help in getting our country back together.

    Reply : 1       2

    Dot Saturday, 9 December 2017 05:24

    A bank does not grant money unless we agree to their policies ..and th policies are determined by the share holders who want to see their interest blossom with good dividends at the expense of course of the borrower ..simple loan means we pay interests don't we ?

    Reply : 0       1

    Dinesh Friday, 8 December 2017 10:46

    I suppose the Global Credit Collection Agency has succeeded in breaking our legs due to the imprudence of the Rajapaksa dynasty.

    Reply : 0       2

    Sam Friday, 8 December 2017 12:43

    We have to beg money from them. How can we be the master race. What is a master race? It's 2017 not the 18th century.

    Reply : 1       4

    daham Friday, 8 December 2017 13:32

    Real meaning of this is our foreign debt burden is getting more heavier.

    Reply : 0       2

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