Sri Lanka to discuss new program later: IMF Rep

Oct 12, 2012 (LBO) – A separate mission would arrive in Sri Lanka to have discussion on an ongoing program with Sri Lanka with the end of a successful 2.5 billion US dollar standby arrangement, an International Monetary Fund official said. IMF’s resident representative in Colombo Koshy Mathai said a mission that had just left the island was engaged in routine discussions.

Sri Lanka is due to present a budget for 2013 in November.

Mathai told a business forum at Sri Lanka’s Ceylon Chamber of Commerce that he expected the administration to continue on a path of gradual deficit reduction with policies that prevented shocks to the economy.

Though growth was lower, interest rates and inflation was higher than in 2011, the economy was now stable and on a recovery track, he said.

Sri Lanka has expressed interest in having an ongoing ‘surveillance’ program with the IMF which may involve further contingency funds of around 500 million US dollars.

The 2.5 billion US dollar program that ended helped rescue the country from two balance of payments crises.

The IMF, as the global monetary watchdog keeps a tab on all member countries and gives policy advice and technical support when needed, even without a specific program