A delegation from the International Monetary Fund is due in Colombo tomorrow for a final review and subsequent disbursement of $420 million under the $2.6 billion Standby Arrangement (SBA), officials said. This is the final instalment due to Sri Lanka under this programme.
The delegation will not be led by Dr. Brian Atken, Sri Lanka mission leader for many years, as he has been replaced by a new team leader, they said.
The team arrives tomorrow a week after money markets were shaken up owing to, what Central Bank Governor Ajith Nivard Cabraal said, was a miscommunication in the level of the US dollar. A senior CB official had been quoted in a newspaper interview as saying that the dollar would settle at Rs. 130-132, prompting the market to react.
The next day the CB issued a statement saying that the dollar was expected to
stabilize at the Rs. 125 level. “It was a miscommunication,” said Mr. Cabraal, speaking by telephone from Bangkok yesterday where he is part of President Mahinda Rajapaksa’s visiting entourage.
Money market dealers said the dollar was traded at Rs. 132 on Wednesday but came down to Rs. 131 on Friday. They said the CB appeared to be using the state-owned People’s Bank (PB) to sell dollars and bring the rate down.
“Normally the PB is in the market buying dollars as it has huge bills from the Ceylon Petroleum Corporation and fertilizer purchased to settle and rarely sells dollars. Sometimes this happens – the CB using the PB to sell dollars and stablise the market,” one dealer said. Asked whether there is a new $500 million facility being negotiated with the IMF as reported in a newspaper, Mr. Cabraal said that facility is actually $420 million which was the final instalment in the current loan.
“There is no other facility that we are taking or have asked for. However we may discuss a surveillance programme with the IMF when the team arrives,” he said.
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