Sri Lanka to receive 2.5-billion-dollar loan from IMF

Sri Lanka to receive 2.5-billion-dollar loan from IMFColombo  - The International Monetary Fund (IMF) will provide Sri Lanka with a 2.5-billion-dollar loan in what is seen as a major boost to the economy and the government in rebuilding the country after 26 years of civil war, an official said Tuesday.

The IMF has already announced a tentative agreement with Sri Lanka to provide the loan, but formal approval will be made on Friday.

Deputy Finance Minister Ranjith Siyambalapitiya told Parliament about the loan on Tuesday and said that "receiving of the loan is a tremendous victory for President Mahinda Rajapakse's government."

He said the loan is to be provided within 20 months in eight installments at a relatively small interest rate of 0.5 per cent.

On Monday Sri Lankan government representatives signed a formal document setting out an agreed economic programme with the IMF. The "letter of intent" signed by both the Central Bank of Sri Lanka and the country's finance minister sets out in detail the moves the country proposes to take to stabilize its economy.

The Sri Lankan government is currently trying to resettle some 270,000 civilians displaced by the war. Most of them are currently being maintained in refugee camps.

Government forces defeated the Tamil rebels and recaptured all rebel-held areas by May 18, bringing an end to the 26-year-long conflict.(dpa)