March 04, 2009 (LBO) – Sri Lanka has asked for a 1,900 million US dollar balance of payments support facility from the International Monetary Fund (IMF), and the first tranche was expected later this month, the central bank said. Sri Lanka also got support from the IMF after the Indian Ocean tsunami hit the country in 2004.
The government expected “a significant portion of the proposed facility disbursed up-front, immediately after the Executive Board of the IMF approves the facility,” in March, the Central Bank said.
“It is also expected that such support would enhance the assistance from other development partners as well as significantly improve international investors’ confidence on Sri Lanka.”
Central Bank said it had asked the equivalent of 300 percent of Sri Lanka’s current quota, which is over 400 million special drawing rights.
The Central Bank said with an internal conflict ending, a large quantum of external financing is needed, and the country’s external sector has been hit since September 2008.
Sri Lanka’s foreign reserves have fallen from 3.4 billion US dollars in September to 1.7 billion US dollars in December, due to peg defence.
Sri Lanka last went for a ‘standby facility’ in 200