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Sri Lanka IMF loan tranche held back on runaway budget

Feb 25, 2010 (LBO) - The International Monetary Fund (IMF) has held back the third tranche of a 2.



6 billion US dollar loan to Sri Lanka after the country's budget went off track in the last quarter of 2009.

The tranche of slightly over 300 million US dollars was expected in March after following the completion of a review by an IMF mission in February.
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An IMF mission chief Brian Aitken said the lender was unable to 'complete' its review at this time.

In limbo

When a mission fails to 'complete' a review an IMF program effectively stays suspended. The program eventually ends if a subsequent review does not take place.

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Sri Lanka's last two IMF programs ended with missions that were unable 'complete reviews'.
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"Government has expressed their strong desire to bring the program back on track," Aitken he told reporters.

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"The review will be completed only after May. It made sense for us to re-engage in comprehensive talks after the formation of the new cabinet following the election."

A new IMF mission is expected to come back, after parliamentary polls on April 08 though a specific date has not yet been set.

Sri Lanka's central bank has met reserve money (the narrowe

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