Govt. set to boost forex reserves by $8.4 bn
Buoyed by the impending approval of an International Monetary Fund (IMF) facility on March 20, Sri Lanka will implement an ambitious plan to boost foreign reserves by at least US$8.4 billion through the IMF bailout loan of $2.9 billion, World Bank immediate commitment of $1.5 billion, ADB aid of $1billion and $3 billion through the restructuring of selected state-owned enterprises (SOEs).
The country’s foreign reserve build up will begin soon after IMF starts disbursing the tranches of the Extended Fund Facility in two weeks’ time, State Finance Minister Shehan Semasingha told the Business Times.
Sri Lanka has now received financing assurances from all major bilateral creditors, IMF sources confirmed.
In a brief statement IMF noted that this paves the way for consideration by the IMF’s Board on March 20 the approval of the Staff Level Agreement reached on September 1, 2022 for financing under an Extended Fund Facility.
The government will expedite the implementation of an economic reforms programme despite any obstacles as it will help Sri Lanka recover from its present crisis and set it on a path of strong and inclusive growth, Finance Ministry sources said.
Sri Lanka normally earns $12 billion per annum from exports, $7 billion from foreign expatriate remittances and $4 billion from tourism totalling $23 billion and it has to spend $22 billion for imports.
The balance amount of $1 billion could be used for partly servicing of multilateral debt which is around $5 billion per annum, a senior ministry official said adding that they hope to manage the daily cash flow prudently following the speedy recovery of the economy.
He expressed optimism that a surplus in multilateral debt servicing could be managed with the strengthening of foreign exchange inflows and other avenues.
The Finance Ministry will encourage the boosting of exports and tourism extending concessions to these two sectors immediately while restricting imports by improving local production specially agriculture to meet the needs of the people on the directions of President Ranil Wickremesinghe..
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