Page last updated at 10:12 GMT, Tuesday, 17 March 2009

Sri Lanka plays hardball with IMF

Mahinda Rajapaksa
President Mahinda Rajapaksa says Sri Lanka will not bow to IMF conditions

Sri Lanka will not accept any conditions on a loan from the International Monetary Fund (IMF), the island's president has said.

"We will not pawn or sell our motherland to obtain any monetary aid," said Mahinda Rajapaksa.

The Sri Lankan government is in talks with the IMF about a $1.9bn (1.4bn) loan to help combat the economic downturn and pay for reconstruction.

The IMF usually insists on conditions for any emergency loans.

No forced measures

These involve taking steps such as cutting public spending or raising interest rates.

But Sri Lanka has made it clear it will not be forced into taking any such measures.

"Neither will we bow to any conditions or transform our land to a colony," Mr Rajapaksa is quoted as saying in the local, state-controlled Daily News newspaper.

The country has been hit by slowing tea and textile exports that have depleted the country's foreign currency reserves.

It also needs money to pay for reconstruction work in the north and east of the island after recent fighting with Tamil Tiger rebels.

Sri Lanka's central bank also believes that an IMF loan would encourage other institutions to offer monetary support, as well as boosting international investors' confidence in the island.

The bank said it expects government negotiations with the IMF to be completed by the end of March.

On Monday, Serbia announced a 2bn euro ($2.6bn; 1.85bn) loan from the IMF.

Print Sponsor

The BBC is not responsible for the content of external internet sites

MSNBC Sri Lanka military assails aid groups on war - 11 hrs ago
Christian Science Monitor Sri Lanka: dispute over how to help civilians in war zone - 11 hrs ago
Reuters S.Lanka rupee flat, shares up with high turnover - 21 hrs ago
The Hindu Sri Lanka will not bow to any condition from funding agencies - 48 hrs ago
Fresno BeeSri Lanka rejects UN charge of possible war crimes - 15 Mar 2009
* Requires registration

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Sign in

BBC navigation

Copyright © 2018 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific