Sri Lanka expects more support from multilateral lenders: Treasury chief

HANOI, Mar 22, 2010 (LBO) – Sri Lanka is looking for more flexibility and backing from multilateral lenders as the country emerges from a war and a global crisis and is planning sustainable growth for the future, a top official said. IMF only lends money to the central bank to boost its reserves and budgetary support comes from other lending agencies.

But to get pure budgetary support – the so-called program loans – a government has to make reforms that will generate future revenues and growth. An IMF bailout in 2001 was supported with co-financing from both the ADB and World Bank.

Sri Lanka’s deal with the IMF was suspended last month after the island failed to meet a key budget target, but the agency says it remains enaged with the government and a team is expected to visit the island after April.

Broader Support

But there are expectations of a mission visiting the island in May after a budget is presented to parliament after elections in April.

“In order to move toward a much more meaningful, stable and co-ordinated approach IMF, World Bank, ADB and JBIC support would be crucial to support reforms,” Jayasundera said.

He said several speakers had already told the forum how the IMF