IMF facility for Sri Lanka remains unchanged
The International Monetary Fund (IMF) has given an assurance to Sri Lanka that the Extended Fund Facility arrangement of around US$1.5 billion will remain unchanged, as approved in June 2016, IMF official sources said.
The lending agency has arrived at this decision despite the setback in the Government’s commitment towards economic reforms during the 52-day political instability in the country.
Government authorities requested to extend the EFF arrangement for an additional year, until early June 2020, to allow more time for the completion of the economic reform agenda, IMF Sri Lanka mission chief Manuela Goretti told the Business Times.
The IMF team reached understandings at the staff level with the Sri Lankan authorities last February on the request, which will be considered by the IMF Executive Board in May, together with the request to complete the fifth EFF review, she said.
Following the IMF team visit to Colombo last February, the authorities have been taking steps to complete all the pending actions for the fifth review, including submission to Parliament of the 2019 budget.
As planned, the Board is expected to consider Sri Lanka’s request for completion of the fifth review next month, after the IMF-WB Spring Meetings which will begin in Washington tomorrow (Monday), she revealed in an e mail response.
A total of about $500 million remains to be disbursed under the EFF arrangement, she disclosed.
Subject to the IMF Board’s approval of the extension request, this is expected to be spread evenly into three tranches, over three reviews.
Accordingly, the amount of the next tranche for the completion of the fifth review is expected to be about $165 million.
The tranches for the sixth and seventh EFF reviews will be comparable in size and are expected to be disbursed in late 2019 and early 2020, subject to the completion of the respective reviews, she confirmed.
The US dollar amount of each tranche will be determined based on the value of the IMF’s SDR (Special Drawing Rights) at the time of IMF Board approval of the disbursement, she added.