Sri Lanka needs IMF loan: Strauss-Kahn

May 15, 2009 (LBO) – International Monetary Fund Managing Director Dominique Strauss-Kahn said Sri Lanka needs the help of the multilateral lending agency and talks were still underway on the IMF loan. He told a news conference Friday that Sri Lanka, which has asked for a 1.9 billion dollar IMF loan, was a “special situation”.

Strauss-Kahn was reported as saying in news reports that the IMF was still having talks with Sri Lanka but that he did not know when an agreement would be reached.

He said the Sri Lankan economy “obviously needs the help of the IMF” and that the lending agency was “trying to find a solution to the problem in the next few weeks.”

His remarks came after US Secretary of State Hillary Clinton said it is not an appropriate time to consider a massive International Monetary Fund loan for Sri Lanka.

Clinton’s remarks have been interpreted an effort to put pressure on Sri Lanka to stop the war against Tamil Tiger rebels who are making their last stand.

Government troops have cornered the Tigers on a small strip of coast on the island’s north-east and have said the fighting would be over in the next two days.