SL slated to secure more international funding to boost Financial sector: President
By: Staff Writer
Colombo (LNW): Now that the immediate economic crisis is over and Sri Lanka has secured the second tanche of US$337 million, the government has to seek more international funding which includes access to IDA and access to the IBRD (International Bank for Reconstruction and Development, a part of World Bank that lends to middle-income countries).
Extended Fund Facility from the IMF is quite essential in times like this, where the country has lost access to the market for finance.
In this context President Ranil Wickremesinghe yesterday told Parliament that Sri Lanka’s success in securing the necessary funds from international financial institutions in recent months would provide a significant boost to the country’s financial sector, ensuring its complete security.
With the International Monetary Fund approving the second tranche and the World Bank extending US $ 150 million for deposit insurance, Sri Lanka is poised to receive additional funding for the development process from the other key financial institutions such as the Asian Development Bank and JICA, at low-interest rates and favourable terms, he said.
World Bank lending has supported Sri Lanka’s development for several decades and its outstanding loan portfolio tops 2.4 billion dollars across 17 projects. However when Sri Lanka’s economic crisis hit the bank repurposed around 14% of its undisbursed loans to help pay for imports of LP gas and fertiliser.
“This approval reinstates the confidence of foreign investors, who can now invest in Sri Lanka without hesitation. Our international letters of credit are once again recognised, providing us with the opportunity to expand our market more easily and gain global recognition. It is imperative that we strive to maximise these opportunities for the benefit of our country,” he said.
Although the country has bagged some wins, President Wickremesinghe said it is crucial to acknowledge that achieving this victory does not signify perfection.
“According to President Wickremesinghe, as Sri Lanka progresses forward, it is imperative to advance steadfastly along the path while exercising caution to prevent the recurrence of past errors that led the nation towards financial insolvency.
“The commitment to these principles will unequivocally influence the security or jeopardy of our country’s future,” he said.
President Wickremesinghe pointed out that the journey towards revival and growth is marked by several paramount objectives—minimising the foreign exchange deficit, achieving trade balance, narrowing the income and expenditure gap, optimising the surplus in the primary budget account and upholding stringent financial discipline.