Sri Lanka bailout talks progressing: IMF

Mar 27, 2009 (LBO) – An International Monetary Fund (IMF) mission in Sri Lanka is talking with the government on a stand-by arrangement and but the volume of financing the island requires is yet to be decided, an official said. “We don’t have any date as to the conclusion of those discussions or their likely bringing to the IMF Board, and we don’t have any information yet on how much Sri Lanka will be requiring from the Fund,” Caroline Atkinson, head of the external relations department told reporters in response to a question from LBO.

Sri Lanka has asked for 1.9 billion US dollars after the country lost about two-thirds of its foreign reserves or about 2.0 billion US dollars since last September.

It is not the usual practice of the IMF to replace all the lost reserves, under a standby arrangement, though the Fund also takes into consideration near-term financing needs of the country as well as the size of the country’s domestic money supply.

There had been expectations before the mission arrived that a deal would be ready by the first or second week of April if negotiations progressed rapidly and Sri Lanka was willing to accept prudential measures needed to stabilize the economy.

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