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Sri Lanka won’t beg for aid: central bank chief

[AFP, Friday, 12 June 2009 08:08 No Comment]

War ravaged Sri Lanka will not beg for foreign aid even as a 1.9 billion dollar bailout from the IMF has been delayed, the island’s central bank chief has said.

"We will never go after donors or lending agencies with a begging bowl. We are capable of standing on our own and raise funds through capital markets," Central Bank of Sri Lanka Governor, Nivard Cabraal, told AFP.

Sri Lanka tapped the International Monetary Fund in March in a bid to stave off its first balance of payment deficit in four years after the island’s foreign currency reserves fell to around six weeks worth of imports.

The loan has been delayed due to political pressure from the US, Britain and other Western nations over Colombo’s handling of the final stages of the battle against Tamil separatists and charges that thousands of civilians were killed.

The United States is the main shareholder in the IMF and its approval is key to the release of the money.

Despite pressure from the West, Cabraal said he was confident the rescue package would be approved.

The island’s 37-billion-dollar economy was caught up in the global economic crisis last year, with exports of garments and tea affected and foreign remittances slowed.

"We have dignity and our own identity in the international community. Sri Lanka does not want to go after anyone for aid with bended knees," Cabraal said.

He said foreign reserves have picked up in the past several weeks, with money coming from aid flows — to meet the humanitarian needs of nearly 300,000 displaced people in the north — remittances and foreign investments.

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