Extended Fund Facility (EFF) of US$ 2.9 billion For the first time SL has met IMF conditions in full

 By Sandun A. Jayasekera   

Sri Lanka has never met in full the conditions of the agreements signed with the IMF in the past and therefore has failed to obtain in full the amount of the loan agreed initially, but for the first time Sri Lanka will receive the Extended Fund Facility (EFF) of US$ 2.9 billion from the global lender as agreed, the government said yesterday.

Cabinet spokesman, Dr. Bandula Ginawardana told the weekly post cabinet news briefing last morning that the IMF has also given the green light to use the EFF for Structural Budget Balancing (SBB) which is a new facility.   
The Executive Board of the IMF has given approval for a financial package of US$ 2.9 billion to Sri Lanka’s programme under the Extended Fund Facility (EFF).   

Sri Lanka has sought IMF assistance for 16 times in the past since the time of former Finance Minister Dr. N.M. Perera. Sadly, Sri Lanka has a poor record of honouring IMF agreements. But this time Sri Lanka has given a firm pledge to the IMF that we are committed to carry out the agreement in full inter-alia including the debt structuring in accordance to the IMF road map, restructuring of State Owned Enterprises (SOEs) increasing of state revenue by revision of the tax regime, making the CBSL an independent body, curtailing corruption in governance and reduction of public service etc.   

Responding to a journalist, Minister Dr. Gunawardana said following the releasing of the first tranche of US$ 330 million shortly and thereby the strengthening of the foreign reserves, the government would not be in a position to ‘open a flood gate’ for unmonitored imports.   

“The Central Bank will keep a watchful eye on foreign reserves, Forex management, money market and the dollar before relaxing non-essential imports,” Minister Gunawardana emphasized. 
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