Sri Lanka asks for IMF bail out
View(s):Sri Lanka has made an official request for a fresh bail out package from the International Monetary Fund (IMF) to help tackle a widening balance of payment deficit. This was confirmed by the IMF spokesperson who said that “they have received a request from the government for a programme”.
The IMF has a precautionary facility but a stand-by loan comes under a bail out package, a senior official said adding that as a result of the tight liquidity in capital markets owing to the rise in global interest rates, a bail-out package from the IMF is unavoidable for Sri Lanka.
The IMF has also been requested to help reform Sri Lanka’s taxation system, he said adding that a meeting with IMF representatives and treasury officials headed by its secretary Dr. R H S Samaratunga was held this week to discuss this programme of assistance. The defeated Rajapaksa regime had to be bailed out twice by the IMF. In 2009 Sri Lanka has obtained a bailout loan of US $2.6 billion to avert a balance-of-payment crisis and the country was hit by property bubble, fuel subsidy credits and a run by foreign investors on rupee bonds. In 2011 the country had to seek IMF assistance when it printed money to support fuel subsidies that generated the balance of payments crisis. (Bandula)