Financial Times

IMF mission to visit before approval of funds

A team from the International Monetary Fund (IMF) will visit Sri Lanka in early May to check on the island's economic health before giving a further tranche of $80 million under the concessionary lending scheme Poverty Reduction and Growth Facility (PRGF).

"There is hope to review the PRGF after the elections," Jeremy Carter, IMF's Senior Resident Representative, told The Sunday Times FT in a telephone interview from London.

The IMF postponed the release of the second tranche under its $567 million PRGF following the disruption of the peace process. Last Friday, the Executive Board of the IMF discussed Sri Lanka's current status as part of its annual Article 4 consultation process. The IMF review mission made two trips to Sri Lanka to review the economic situation prior to this Board meeting. Carter said that the Board had taken note of the report submitted by the government under the Fiscal Management (Responsibility) Act. "It is a very accurate assessment and is not over ambitious," he said. He said that it remains to be seen whether claims of political parties promising employment after they come to power would be fulfilled.

The IMF offers concessional financing under the PRGF to eligible low-income members and the loans carry an interest rate of 0.5 percent. It approved a PRGF to Sri Lanka in April 2003 and released its first tranche during the same month with a view to releasing the rest in three tranches of $81 million over three years.

(DE)

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