IMF Lifeline not needed – CBSL Governor | Daily News

IMF Lifeline not needed – CBSL Governor

Sri Lanka’s Central Bank Governor told CNBC that the South Asian nation doesn’t need an economic lifeline from the International Monetary Fund (IMF).

“Well, we don’t need relief if we have an alternative strategy,” Ajith Nivard Cabraal said on CNBC’s “Squawk Box Asia” on Monday.

He claimed Sri Lanka is able to finance its outstanding debt, especially International Sovereign Bonds, “without causing any pain to our creditors”.Credit agencies have recently warned Sri Lanka may need support to cushion the blow from inflation and foreign exchange headwinds, but Cabraal disagreed with that assessment.

He argued the Government does not need to approach the IMF, especially if it is successful in finding Government-to-Government as well as Central Bank solutions in the short term.

“And we have a strategy to change that into something a lot more sustainable in the next one year or two,” Cabraal said.

India has recently offered credit and foreign exchange support, saying the measures illustrate its commitment to Sri Lanka and its economic growth. That includes a US$ 500 million line of credit to help Sri Lanka purchase fuel as the country grapples with surging inflation.

The Central Bank said food inflation hit 21.5%, noting price spikes for vegetables, rice and green chilies. Non-food inflation rose to 7.6% in December, which the Central Bank attributed to price hikes at restaurants, hotels as well as for alcoholic beverages and tobacco.

But Cabraal dismissed concerns about shortages.

“We don’t have any fuel shortage... There isn’t any shortage of medicines. We have imported US$ 870 million worth of medicines last year,” he said.

“So just one or two items have been highlighted, but that does not mean that Sri Lanka has any shortages. We have all the foodstuffs available. I don’t think there is any reason to say anything much of that,” added Cabraal. (CNBC)

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