Sri Lanka has announced the completion of a $2.6-billion IMF bailout, but is seeking fresh loans to support an economy emerging from decades of ethnic war.
It did not say how much Sri Lanka hoped to secure in fresh loans, but finance ministry sources said Colombo was looking at more than $500 million as a first step.
The original July 2009 IMF bailout was secured when the island’s foreign reserves had dropped to a dangerously low level of $1 billion, or just sufficient to support two weeks of imports.
Since then, Sri Lanka has built up reserves that could finance imports of up to three and a half months, according to the bank.
However, a $10-billion trade deficit at the end of last year caused the local currency to depreciate by about 18% this year.
Last week, Sri Lanka raised $1 billion through a bond issue that was over subscribed by a record 10.5 times despite volatility in global markets, according to the central bank.
However, the IMF has said it forecasts Sri Lanka’s economy to grow at a slower rate this year. (Bangkokpost)