IMF response to securing SWAP facility of USD 1.5Bn China surprising: Cabraal

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State Minister of Finance, Capital Markets, and State Enterprise Reforms Ajith Nivard Cabral says the International Monetary Fund (IMF) response to the news that Sri Lanka has been able to secure a SWAP facility of 10 billion Yuan (USD 1.5 billion) from the Peoples Bank Of China is quite surprising.

“The request for the Covid assistance was made by the Sti Lankan Government from the IMF early last year at the time the Covid pandemic started. But the IMF was dragging its feet in providing the facility,” he said issuing a statement.

“Nevertheless, the Government managed to effectively provide the necessary relief and support to the Sri Lankan people as well as maintain a framework of sound macro fundamentals and even without such financial support from the IMF.”

International Monetary Fund (IMF) said yesterday that they continue to closely monitor economic policy and financial developments in Sri Lanka including the recent agreement on a swap line with the People’s Bank of China for $1.5 billion.

Speaking at the IMF press briefing, Gerry Rice of the Communications Department said that the assessment for emergency financial support to help fight the COVID pandemic has taken longer than for other countries due to Sri Lanka’s daunting economic challenges and high public debt.

“We did receive a request from the Sri Lankan authorities for emergency financial support to help fight the COVID pandemic,” Gerry Rice said.

According to him, the assessment of that support has taken longer than for other countries due to Sri Lanka’s daunting economic challenges and high public debt.

“So we have sought, but not reached understanding, on how to fulfill the key requirements for what could be a rapid financing instrument which would include policies to continue ensuring debt sustainability to address the balance of payment challenges including from the COVID‑19 impact on tourism and to preserve international reserves.”