Sri Lanka to negotiate new IMF ‘surveillance’ program: CB Governor

Jan 03, 2012 (LBO) – Sri Lanka will negotiate a “follow up or surveillance” program with the International Monetary Fund with a standby facility ending in December 2011, Central Bank Governor Nivard Cabraal said. Sri Lanka had a 2.6 billion US dollar stand by deal with the International Monetary Fund from May 2009 after the country ran into a balance of payments crisis.

In 2011 Sri Lanka is estimated to have grown at 8.3 percent, up from 3.5 percent in 2009. Though Sri Lanka asked for only 1.9 billion US dollars the IMF decided to give a 2.6 billion Standby arrangement (SBA) of which 1.7 billion had been disbursed, Cabraal said.

“The IMF standby arrangement provided strong support,” Cabraal told during an annual ‘road map’ speech to the financial sector.

“We are thankful to them.”

The program was however has been in abeyance from September 2011 and two tranches held back after the IMF raised concerns about the defence of a tight dollar peg and reserve losses.

“As you know the last test date for the IMF SBA program was December 31,” Cabraal said.

“And we expect a review mission to come on the third week of January 2011 and we will negotiate with the IMF a follow up or sur