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Tuesday, 03 April 2012 - 7:31
Sri Lanka IMF bailout loan resumed
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The International Monetary Fund said it will give 426 million US dollars to Sri Lanka, resuming its suspended bailout loan, after authorities took corrective steps to stem credit and foreign reserve losses.

IMF deputy managing director Min Zhu said in a statement that the adjustment measures implemented by the authorities have placed the economy on a more sustainable course.

However he added that it will take time for the new monetary and exchange rate regime to become fully established, and the authorities will need to stand ready to adjust policies further to stabilize external reserves, especially if the global environment becomes less favourable.

A sudden spike state credit in an environment of strong private sector credit growth cause the exchange rate to come under pressure in mid 2011 and the IMF suspended its program asking the Central Bank not to defend its peg.

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