IMF inks pact with Sri Lanka on $2.5 bn loan
The International Monetary Fund (IMF) has reached an agreement with Sri Lanka to provide the island nation with about USD 2.5 billion, to help it in its reconstruction efforts.world Updated: Jul 21, 2009 14:02 IST
The International Monetary Fund (IMF) has reached an agreement with Sri Lanka to provide the island nation with about USD 2.5 billion, to help it in its reconstruction efforts.
This is the first major IMF loan to Sri Lanka after the recent end of the civil war in the country in which the Liberation Tigers of Tamil Eelam (LTTE) was defeated.
"The reconstruction effort will be a large undertaking, with significant spending needs," IMF Managing Director Dominique Strauss-Kahn said.
"The government's program aims to meet these needs while safeguarding debt sustainability by boosting revenue and reducing spending in other areas," he said.
This program will also provide a framework for international donors to assist the government in financing its reconstruction effort, he added.
Moreover, he said the end of the conflict provides Sri Lanka with a unique opportunity to undertake economic reform and reconstruction, which would be key to laying the basis for higher economic growth in the years ahead.
To this end, the government has formulated an ambitious program aimed at restoring fiscal and external viability and addressing the significant reconstruction needs of the conflict-affected areas, he said.