Sri Lanka loan to be approved in “coming weeks”: IMF

May 22, 2009 (LBO) – The International Monetary Fund (IMF) has not yet scheduled a meeting of its board to pass a loan to Sri Lanka but the lender was hoping to give the loan in “the coming weeks”, an official said.

“I think that’s something that we’re reviewing right now,” Kelly told reporters in Washington.

“[T]his is just a couple days after the end of this quarter-century-long conflict.

“We still need to make an assessment. We need to – when I say we, I should say the international community needs to make an assessment of exactly what happened and consult with the Sri Lankan Government on the way forward.”

IMF’s Atkinson said when the institution’s executive board passes a loan it also makes “a judgment on the ability of a government to carry out the policies” that are seen as necessary.

“But we are hopeful that we will be at that point soon,” she said.

Sri Lanka has already floated its currency as a prior action to the loan and has managed to end the large reserve losses seen during a period of peg defence.

But reserves are low and there are concerns about external solvency of the government.

Standard & Poor’s Thursday cut the outlook on Sri Lanka’s speculative ‘B