Lanka Sites

WASHINGTON — The International Monetary Fund said Friday its executive board approved the release of 329.4 million dollars to Sri Lanka, the second portion of a loan to help the country weather the economic crisis.

The IMF said the board completed the first review of Sri Lanka's economic performance under a 20-month standby loan.

This allows the immediate disbursement of the second tranche, bringing total disbursements under the arrangement to 658.8 million dollars.

"Sri Lanka's performance under the standby arrangement is encouraging," said IMF deputy managing director Takatoshi Kato. "Recent economic developments have been stronger than expected, and the near-term outlook has improved. While the Fund-supported program had helped Sri Lanka avoid a balance of payments crisis, fundamental vulnerabilities remain to be addressed. Strict adherence to the program targets and steadfast implementation of the reform agenda will be essential."

The IMF approved the program in July to help the South Asian country rebuild international reserves and strengthen Sri Lanka's domestic financial system. Britain abstained from voting on the loan after politicians indicated they could not support it because of an ongoing tense political situation.

Britain wanted to "secure long-term peace and prosperity" for Sri Lanka through reconciliation between its communities, officials said in a letter to the multiparty parliamentary groups on Sri Lanka and Tamils. Human Rights Watch said the IMF should have set conditions on the loan, including demands that the Sri Lankan government help resettle nearly 300,000 Tamil civilians being held in tightly guarded camps.

The IMF loan, under negotiation with Sri Lankan authorities since March, came two months after the end of the civil war with the rebel Tamil Tigers that claimed up to 100,000 lives and left some 300,000 war-displaced civilians in the north.