Govt gets second instalment of IMF loan

by L.S. Ananda WEDAARACHCHI

The Government will receive the second instalment of US $ 322 million of the US$ 2.7 billion IMF loan on Tuesday, said State Revenue and Finance Minister Ranjith Siyambalapitiya.

The IMF President had said that the Government has achieved satisfactory levels of development and welfare targets even more than what the IMF itself anticipated, he said.

Head of the IMF’s Mission to Sri Lanka Brian Aitken said that the recent economic developments in Sri Lanka have been stronger than anticipated with the decline in output growth showing some early signs of bottoming out.

The economic outlook has been buoyed as exports have recently shown signs of a recovery, with import growth remaining subdued, he said. The minister said that for the first time in March 2003 the UNP Government obtained an IMF loan under very strict conditions, such as restructuring the People’s Bank, not to increase Government servants’ salaries and privatising the remaining shares of the Insurance Corporation. The UNP had received only US$ 70 million and nothing more, he said.

The Minister said that the successful negotiations of the IMF assistance is a great victory of the Government’s Mahinda Chintana policies. Foreign reserves will be increased up to US $ 5.1 billion as a result of this facility, a record achievement for Sri Lanka, he said.

The instalment will also help attract more foreign investors to the country.

The IMF loan facility is clear evidence of sound financial management in the country, he said.

Meanwhile, the Central Bank of Sri Lanka said that it was buying gold to diversify its reserves.

The price of gold hit a record high above, US $1,100 an ounce in trading on Friday in Washington following a report that Sri Lanka had joined India in purchasing gold.