IMF to monitor Sinhala govt. progress in achieving targets..!!!

IMF to monitor govt. progress in achieving targets.... by.... Devan Daniel

Despite the government’s claim that the US$ 2.6 billion IMF loan was granted without conditions, the Technical Memorandum of Understanding (TMU) of the programme indicates tough monitoring by the IMF.

The Central Bank last evening released the TMU which sets out the framework for monitoring the government’s performance with regard to the economic targets set out in the Letter of Intent for the loan.

The IMF would now conduct quarterly evaluations after approving the standby facility to Sri Lanka for balance of payments support last Friday.

The document outlines and defines the fiscal targets, monetary targets, external sector targets and data reporting requirements under the standby facility arrangement.

It also outlines the criterion on each of the above and provides a list of necessary adjustments that are recommended if Sri Lanka fell short of any of the targets.

The first review was to be carried on or after July 30, and the second on or after September 30, 2009.

The document states that Sri Lanka would have to abide by the following with regard to data reporting:

"Sri Lanka shall provide the Fund, through reports at intervals or dates requested by the Fund, with such information as the Fund requests in connection with the progress of Sri Lanka in achieving the objectives and policies set forth in the Memorandum of Economic and Financial Policies.

"All program monitoring data will be provided by the Ministry of Finance and the Central Bank of Sri Lanka (CBSL). Data relating to the external and monetary targets will be furnished within no more than three weeks after the end of each month.

"With regards to the fiscal targets, the data in table 5 will be furnished within no more than five weeks after the end of each month and the data in table 6 within no more than nine weeks after the end of each month. For the overall balance of the CEB and the CPC, estimates will be available within four weeks," the TMU says.



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