No intention to seek IMF support via any programme: CB Governor

Setting the record straight, the Central Bank Governor Professor W.D. Lakshman last week reiterated that there is neither a serious discussion nor intention to seek the support of the International Monetary Fund (IMF) to overcome the current economic crisis experienced by Sri Lanka, exacerbated by the pandemic.  

 “There has not been a serious discussion or a decision made by either the Central Bank or the government about going for an IMF programme. There is no intention at the moment,” Prof. Lakshman stressed. 

He was of the belief that the domestic policy response instituted to blunt the effects of the crisis would alleviate the near term pains before the pressures get eased towards the fourth quarter with the gradual returning of normalcy  and the restoration of foreign inflows, which are now under stress. 

The last IMF programme since 2016 through 2020 left a bitter taste among Sri Lankans, as it insisted on revenue-based consolidation, which requires all taxes to be raised, a clear disincentive for value creation in countries with developing economies such as Sri Lanka.

However, Sri Lanka would take the receipt of US$ 780 million as the special drawing rights allocation from the IMF towards August or September this year based on the 0.12 percent quota assigned for Sri Lanka out of the general allocation of US$ 650 billion available for all member countries to support pandemic induced stresses on their external sectors.

“This needs not be followed by a request from the (member) country, and this is coming as a right to that country based on the quota contribution of the country to the IMF,” Professor Lakshman said.