CB says met all end-December IMF targets

Saturday, 1 January 2011 00:30 - - {{hitsCtrl.values.hits}}

COLOMBO (Reuters) - Sri Lanka has met end-December IMF targets for net domestic financing, net international reserves, and reserve money required under a $2.6 billion loan, its Central Bank governor said on Thursday.

“We have met the targets,” Ajith Nivard Cabraal told Reuters, referring to the December targets without elaborating on the numbers.

The quarterly targets are important for the International Monetary Fund to decide on the next tranche of its loan. Sri Lanka has so far received around $1.4 billion in five tranches.

The IMF delayed the third tranche of the loan after Sri Lanka’s 2009 budget deficit hit an eight-year high of 9.7 percent, overshooting the 7 percent target. In its last assessment, the global lender said Sri Lanka had made substantial progress in making fiscal policy more sustainable, but urged full execution and more aggressive steps towards reform. The IMF approved the loan to help boost the island’s foreign exchange reserves after they fell to an eight-year low of $1.3 billion by March last year.

“We are well above the range the IMF wanted to build and the reserves are no longer a concern,” Cabraal said. “Investor confidence will be reiterated further through this and it will take place with the IMF endorsing our policies.” Koshy Mathai, the IMF’s resident representative for Sri Lanka, declined to comment saying he had not yet received details of the latest figures.