International Monetary Fund approved 1.5 billion US dollar loan to Sri Lanka

The International Monetary Fund (IMF) on 7 June 2016 approved 1.5 billion US dollar loan to Sri Lanka. IMF has already transferred 168 million US dollars as the first Instalment with immediate effect to support the country’s economy.

The Executive Board of the IMF accepted this 36-month extended arrangement under its Extended Fund Facility (EFF) with Sri Lanka under special drawing rights.

Highlights of the Funding
• An early disbursement of about 168.1 million US dollars will be made immediately.
• The remaining amount will be settled in six installments on quarterly reviews.
• There will be an additional 650 million US dollars support in other multilateral and bilateral loans, bringing total support to about 2.2 billion US dollars.

This funding is aimed at:
• Meeting balance of payments needs arising from external environment and pressures
• Raising revenue through new taxes
• Financing the additional budget spending

To achieve the above laid objectives, IMF will envisage implementation of a set of reforms under following six pillars:
• Fiscal consolidation
• Revenue mobilization
• Public financial management reform
• State enterprise reform
• Transition to flexible inflation targeting under a flexible exchange rate regime
• Reforms in the trade and investment regime

Background
Sri Lanka has an IMF quota of 578.8 million SDR. It became a member of the IMF on 29 August 1950.

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