A Brief Colonial History Of Ceylon(SriLanka)
Sri Lanka: One Island Two Nations
A Brief Colonial History Of Ceylon(SriLanka)
Sri Lanka: One Island Two Nations
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Thiranjala Weerasinghe sj.- One Island Two Nations
?????????????????????????????????????????????????Wednesday, July 19, 2017
IMF completes second review of the extended arrangement

On
July 17, 2017, the Executive Board of the International Monetary Fund
(IMF) completed the second review of Sri Lanka’s economic performance
under the program supported by a three-year extended arrangement under
the Extended Fund Facility (EFF) arrangement. Completion of the review
enables the disbursement of the equivalent of SDR 119.894 million (about
US$ 167.2 million), bringing total disbursements under the arrangement
to the equivalent of SDR 359.682 million (about US$ 501.5 million).
In
completing the review, the Executive Board granted a waiver of
nonobservance of the continuous performance criterion on accumulation of
external arrears which was missed due to continued difficulties of
establishing a payment platform and waivers of applicability of the
performance criteria for end-June 2017 on floor of the central
government primary balance and the program net official international
reserves of the Central Bank of Sri Lanka, given the unavailability of
the information necessary to assess observance.
Sri Lanka’s three-year extended arrangement was approved on June 3, 2016 in the amount of about SDR 1.1 billion (US$1.45 billion, or 185 percent of quota in the IMF at that time of approval of the arrangement. See Press Release No. 16/262 ). The government’s reform program, supported by the IMF, aims to reduce the fiscal deficit, rebuild foreign exchange reserves, and introduce a simpler, more equitable tax system to restore macroeconomic stability and promote inclusive growth.
Following the Executive Board’s discussion of the review, Mr. Mitsuhiro
Furusawa, Acting Chair and Deputy Managing Director, said:
“Sri Lanka’s performance under the Fund-supported program has been broadly satisfactory. Macroeconomic and financial conditions have been stable, despite severe weather events and global market volatility. The authorities launched fundamental income tax reform, undertook meaningful corrective actions to achieve program targets on international reserves, and remain committed to the reform program. Going forward, the reform momentum should strengthen further with greater ownership, building on the progress made so far.
“Fiscal performance has been strong. Targets for the fiscal balance and
tax revenue have been met. The new Inland Revenue Act, which has been
submitted to parliament, will support fiscal consolidation, make the tax
system more efficient and equitable, and generate resources for social
and development programs. Nevertheless, Sri Lanka’s high debt burden and
gross financing needs require further revenue-based consolidation.
Timely progress in structural reforms, including tax administration and
energy pricing, will strengthen the platform for durable consolidation.
“Inflation and credit growth remain on the high side. While monetary
policy was tightened in March, further tightening is desirable until
clear signs emerge that inflation pressures and credit expansion have
subsided. While financial soundness indicators remain stable, banks’
capital adequacy ratio has declined due to rapid credit growth.
Financial sector supervision should be strengthened, and
macro-prudential measures could be deployed to rein in credit growth if
needed.
“Continued international reserves accumulation and enhanced exchange rate flexibility, to which the authorities are committed, would reduce Sri Lanka’s external vulnerabilities.”
IMF-