IMF approves 3rd tranche of Sri Lanka loan

The International Monetary Fund said on Tuesday it had approved the disbursement of the delayed third tranche of a $2.6 billion loan to Sri Lanka.

The global lender in February had delayed the third tranche after the government missed its 2009 deficit reduction targets and said that domestic budget borrowing -- consistent with a deficit target of 7 percent of gross domestic product -- was exceeded by a substantial amount.

“Overall economic conditions in Sri Lankaare improving and the economy is likely to show strong growth this year,” Naoyuki Shinohara, Deputy Managing Director and Acting Chair, said in a statement after the Fund’s Executive Board completed a second and third reviews of Sri Lanka’s economic performance.

The IMF said completion of the reviews allowed for the immediate disbursement of an amount equivalent to SDR 275.6 million (about US $407.8 million).