Financial Times

Strong reserves means no rush for aid - IMF
The International Monetary Fund is "fine-tuning" its staff report on Sri Lanka in preparation for a board meeting to release more aid but does not see any urgency despite the delayed budget because of healthy foreign exchange reserves, its Senior Resident Representative Jeremy Carter said.

"We're in the process of getting the papers ready and trying to see if we need to fine tune the staff report because of any possible changes in the economic picture," he said. "We have not yet finalised a date for the board meeting."

Approval of the second tranche of $80 million under the IMF's $567 million Poverty Reduction and Growth Facility (PRGF) and Extended Fund Facility was delayed with the delay in presenting the budget. The first tranche of $81 million was released in April.

An IMF board meeting scheduled for December 5 was put off because of the uncertainty generated by President Chandrika Kumaratunga's take over of three ministries and suspension of parliament. Carter said the board was unlikely to meet in December because of the need to give two weeks' notice to member countries. It would most likely meet in January after the Christmas break.

"We like the budget. The forecasts in the budget are in line with our forecasts but we need to fine tune things. There's nothing radically different. There are no changes in the economic reform agenda or the fiscal position," he added.

"We don't think there's any massive rush because the reserves position is in good shape." Carter also said the political crisis appears to be getting sorted out. "Everything seems to have settled down quite nicely. The domestic political situation has not worsened radically - that's an encouraging sign."

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