IMF maintains close relationship with the Government
View(s):The International Monetary Fund (IMF) is maintaining a close relationship with the Sri Lankan government under a standard consultation process similar to many other member countries, an IMF official said.
Dr. Koshy Mathai, IMF Resident Representative in Sri Lanka and Maldives, told the Business Times that they have ended a US$2.6 billion bailout package while the proposal for a fresh IMF loan of US$1 billion by the Treasury was not pursued.He said that the press release issued by the IMF has indicated that the Fund may not be in a position to consider any direct or indirect budget support to Sri Lanka, since the current improved status of Sri Lanka does not warrant unconventional and exceptional financial support.
Government officials however said that when the IMF was asked for another $1 billion, they told the Government that they could give the money to Central Bank if the administration was ready for medium term structural adjustments that would help ease balance of payments pressure and that they were not willing to give the money as a ‘lump sum’ to the Treasury for ‘general expenses’.
Dr. Mathai refused to comment on official talks they had with Treasury and Central Bank officials.
A senior government official told the Business Times that the government had fulfilled IMF conditions by strengthening revenue measures and making provisions from the budget to increasingly finance development expenditures through domestic resources.He added that the government also adjusted the rate structure to place the loss-making Ceylon Electricity Board and Ceylon Petroleum Corp. on a sustainable footing to boost economic growth.
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