No new IMF programme – Cabraal

By Paneetha Ameresekere | Published: 2:00 AM Nov 26 2021
News No new IMF programme  – Cabraal

By Paneetha Ameresekere

Sri Lanka will not discuss a new programme with the IMF team who will visit the country next month for their (IMF’s) regular ‘Article IV’ consultations with the Government, Central Bank of Sri Lanka (CBSL) Governor Ajith Nivard Cabraal told reporters yesterday.

He said, instead the Government is pursuing ‘Government to Government’ (G to G) consultations to uplift the country’s foreign reserves, which talks are at an advanced stage.Among those G to G talks are those with India as well, the Governor speaking from CBSL Headquarters in Colombo said.

“A programme with the IMF may entail the requirement to increase interest rates, depreciate the rupee, reduce the number of public servants, sell State assets and curtail pensions, which actions at the moment are not necessary,” Cabraal said.

He said the country’s reserves are expected to the end the year at US$ 3.5 billion, but was evasive as to whether that number will also include a Yuan swap with China equivalent to US$ 1.5 billion. The country’s foreign reserves without this swap, which, however, is also currently available, has sunk to a near 13-year low of US$ 2.3 billion as at last month. 

A figure lower than this was last seen in March 2009 with a number of US$ 1,082 million, immediately available data showed. March 2009 was the height of Sri Lanka’s war with the LTTE terrorism, which was finally subjugated on 18 May 2009.

Cabraal, however, said despite the COVID-19 pandemic, tourism, traditionally Sri Lanka’s third-largest foreign exchange earner, was growing, with 30,000 tourist arrivals recorded in the first three weeks of this month, and with this number expected to end the month at 50,000. 

The month of November is the beginning of Sri Lanka’s tourism season, which peaks next month and ends in March of next year. 

The Governor said the industry expects a month-on-month increase of 10 per cent in tourist arrivals from next year.

Though Cabraal knew of tourism figures as at 21 November, he was, however, unable to say what the value of the country’s foreign reserves were as at that date when questioned. The Governor also said the economy is expected to grow by five per cent this year, from a lower base in 2020.

By Paneetha Ameresekere | Published: 2:00 AM Nov 26 2021

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