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IMF+agrees+to+extend+Sri+Lanka+loan+program
Friday, 01 March 2019 - 10:57
IMF agrees to extend Sri Lanka loan program
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The International Monetary Fund has agreed to extend Sri Lanka’s 1.5 billion dollar loan program by one year and has reached staff level agreement to disburse the sixth tranche of the loan.

A staff team from the International Monetary Fund led by Manuela Goretti visited Colombo during February 14th to 28th, to resume discussions on the fifth review, under Sri Lanka's economic reform program supported by a three-year Extended Fund Facility arrangement.

The team welcomed the Sri Lankan authorities' ongoing efforts to bring their economic reform program back on track following the political turmoil of late 2018.

Following the October 26 political crisis, IMF put program discussions on the 5th review of the Extended Fund Facility on hold until the political situation stabilized.

After completion of the fifth review Sri Lanka would expect to receive a sixth tranche of about 250 million dollars.

At the conclusion of the visit, team recommended that revenue-based fiscal consolidation and SOE reforms are needed to put Sri Lanka's high public debt on a downward path, while providing space for critical social and development goals.

The team concluded that efforts to rebuild foreign exchange reserve buffers, supported by a prudent policy mix and exchange rate flexibility, are critical to strengthen resilience to shocks and market confidence.

The review suggested that Strengthening institutions and accelerating structural reforms can lay the foundation for strong, sustainable, and inclusive growth in Sri Lanka.
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