Sri Lanka may see tyranny of markets to be worse than IMF, World Bank

Feb 28, 2012 (LBO) - The pain imposed by the tyranny of markets could be much greater than adjustments caused by the International Monetary Fund or World Bank, an economist has warned. The Ceylon Electricity Board, which had to generate large amounts of thermal power from the second quarter of 2011 due to failed rains also skipped raising prices in both June 2011 and January 2012, though there was a regulatory process to do so.

Sri Lanka turned to bond markets that did not impose 'conditions' ahead of time like the World Bank and IMF and rapidly ratcheted up commercial borrowings.

Borrowings now include about 2.

5 billion US dollars worth rupee debt and a similar amount of dollar denominated debt.

While dollar denominated debt can only be sold to buyers with dollars, and become a problem only at maturity, a run by rupee bond holders can push the domestic currency down and cause severe tightening in credit markets.

Coomaraswamy said the pain imposed by fleeing creditors on some other countries have been much worse than the adjustments required by multilateral lenders.
buy diflucan online buy diflucan online no prescription

In later 2008 Sri Lanka faced a severe crisis, triggered by a pullout of bond buyers and also s