The usually dreary Colombo Stock Market was a hive of activity today, as the All Share Price Index crossed the 6500 mark, moving up 58 points, following the announcement of a US $ 1.5 billion bail-out from the International Monetary Fund (IMF).
The IMF today agreed to a US $ 1.5 billion loan for Sri Lanka in support of economic reforms aimed at reversing a two-decade decline in tax revenue and reviving growth. IMF’s chief for Sri Lanka, Todd Schneider, said an agreement was reached to release $1.5 billion over a three-year period in support of the country’s reform agenda.
“I am pleased to announce that, in support of the government’s economic reform agenda, the Sri Lankan authorities and the IMF have reached a staff-level agreement on a 36-month Extended Fund Facility (EFF) for 185 percent of Sri Lanka’s quota in the IMF (about SDR 1.1 billion or US$1.5 billion). This agreement will be subject to completion of prior actions and approval by the IMF’s Executive Board, which is expected to consider Sri Lanka’s request in early June. Formal approval of the EFF is expected to catalyze an additional US$650 million in other multilateral and bilateral loans, bringing total support to about $2.2 billion (over and above existing financing arrangements),” he said.