Sri Lanka IMF loan finalized within days: Central Bank Governor

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

April 21, 2009 (LBO) – The final touches to an International Monetary Fund loan would be wrapped up within days and the first tranche is expected in less than three weeks, Central Bank governor Nivard Cabraal said. “Within two weeks or three weeks at the most, the first tranche of the IMF facility will come,” Cabraal told LBO.

“Most of the work has been completed and the final touches will be completed in the next two or three days.”

Cabraal is due to fly to Washington tomorrow. Sri Lanka has asked for a 1.9 billion US dollar stand-by facility from IMF.

Governor Cabraal says a 500 million dollar loan from Libya is also due in the near term.

“It is a government-to-government cash loan,” he said. “In this context people who buy the rupee at high rates will get hurt.”

The Sri Lanka rupee weakened steeply to 120.00/120.30 levels Tuesday after the central bank allowed the rupee to be more market determined.

A free float is usually a prior action for an IMF loan.

The rupee opened at 117.60/90 Tuesday morning after closing at 117.20/30 on Monday.

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