Dollar crisis is over: Central Bank

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  • Governor says IMF bailout package will be approved tomorrow, and first tranche coming on Tuesday 

By Bandula Sirimanna

“The dollar crisis is over,” insists Central Bank Governor Dr. Nandalal Weerasinghe, following a bouncy ride for the Sri Lanka rupee, gaining and then easing against the US dollar during the past two weeks.

In an exclusive interview with the Sunday Times, he says; “We have enough foreign exchange to service the needy sectors,” while expressing confidence that the International Monetary Fund (IMF) bailout package of US$ 2.9 billion, expected to be approved tomorrow (Monday), would improve investor sentiment and open the doors to more funds and investments.

The IMF board meets tomorrow to formally approve the loan for Sri Lanka with the first tranche of nearly US$ 390 million to be disbursed on Tuesday, once the loan is endorsed.

He said for the first time, the loan would include budgetary support to the Government, an entirely new element in IMF lending.

Foreign and domestic debt restructuring talks will have to conclude by around June when the first review of the loan will take place.

Local banks are opposing domestic restructuring and have hired outside consultants for negotiations with the IMF.

The Governor said once the IMF facility was in place, the Asian Development Bank and the World Bank would enhance their commitment through policy-based loans of $4.5 billion in new funding coming for budgetary support.

He said he believed economic recovery would start from the second half of this year while positive growth was expected in 2024.

The IMF has scheduled a news conference for 10.30 p.m. tomorrow on the Extended Fund Facility (EFF) for Sri Lanka where the speakers will be Peter Breuer, Senior Mission Chief for Sri Lanka and Masahiro Nozaki, Mission Chief for Sri Lanka at the IMF.

courtesy sunday times

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