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.
Â 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)