Sri Lanka IMF rep gets warm send-off

Dec 23, 2013 (LBO) – Sri Lanka’s resident representative from the International Monetary Fund, Koshy Mathai got a warm send off from authorities in the island at the end of four years and the first completed program in the island’s history. “We had a good program, we had a very interesting outcome and after that we had some adventurous times in our country’s economy,” Governor Nivard Cabraal said at a farewell organized by the Central Bank.

He described Mathai as a member of the central bank family.

The IMF has traditionally had an office inside the Central Bank.

Mathai came to Sri Lanka in late 2009, when Sri Lanka entered 2.5 billion US dollar bailout program in the wake of a balance of payments crisis involving energy subsidies and a pullout by global investors in rupee bonds at the start of a widespread credit bubble and banking panic that is now described as the ‘Global Financial Crisis.’

Sri Lanka floated the rupee in mid 2009, ending sterilized forex sales and backed with IMF money regained foreign investor confidence and went on to build up its foreign reserves, boost growth and lower interest rates and the rupee strengthened.

In 2011, rising oil prices and a drought made politicians subsidize energy again,