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Sri Lanka says US assured no blocking of IMF loan

July 9, 2009 (LBO) - Sri Lanka has received an assurance from a US diplomat that its application for a loan from the International Monetary Fund (IMF)) would be viewed on economic factors alone, the island's foreign ministry said.
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Yesterday the government presented more 'supplementary estimates' to parliament to increase spending.

Officials say Sri Lanka will have now have to revise its technical memorandum with new fiscal data.

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Sri Lankan politicians have slammed the US for bringing a 'political agenda' to IMF negotiations.


Relations between Sri Lanka took a turn for the worse after the Obama administration came to power over the treatment of civilians in the last stages of fighting with the Tamil Tiger separatists.



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Sri Lanka floated the rupee in March as a prior action for the IMF loan, and has since escaped the balance of payments crisis worsened by a defence of a de facto peg with the US dollar.

The Central Bank had bought more than 450 million dollars from forex markets since the float and Central Bank Governor Nivard Cabraal has said the loan is no longer urgent but would like to have it as a buffer.

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Gross foreign reserves are estimated to top 1.5 billion US dollars now.

In additio

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