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INTERVIEW-Sri Lanka to request IMF waiver on deficit-cbank

[Reuters, Tuesday, 16 March 2010 09:30 No Comment]

Sri Lanka will seek a waiver from the International Monetary Fund (IMF) after failing to meet its 2009 budget deficit target as agreed for a $2.6 billion loan, the central bank said on Monday.

Authorities hope a waiver would allow payments from the loan to resume, K.D. Ranasinghe, the chief economist at the central bank, told Reuters in an interview.

The IMF said late last month that it was delaying the third tranche of the loan after the government missed its 2009 targets.

Sri Lanka also hoped to renegotiate the IMF target for its 2010 budget deficit, Ranasinghe added.

Sri Lanka’s 2009 deficit hit an eight-year high of 9.7 percent of the gross domestic product, much higher than a target of 7 percent agreed with the IMF, and authorities have said it would also miss its goal for 2010. [ID:nSGE6210HH]

The loan has helped to stabilise the rupee currency LKR= and boost global investor confidence in the South Asian country.

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