Wednesday, June 17, 2009

Sri Lanka to get $ 2.5 B IMF loan

Sri Lanka is expected to receive a US $ 2.5 billion loan from the International Monitory Fund (IMF) this month, a top Central Bank official told Daily Mirror on condition of anonymity.

The loan is more than the US $ 1.9 B that Sri Lanka had sought from the IMF, the official added, although there was no official confirmation from the IMF yet.

A Reuters report, meanwhile, said Sri Lankan shares rose on Monday to a new nine-month high, led by foreign buying of blue chips on an expected IMF loan approval and continued local purchases of plantation and hotel shares.

The rupee closed flat as a state bank bought dollars. The Colombo All-Share Price Index rose 1.4 per cent or 31.50 points to 2286.12, its highest close since Sept 16.

“It was a very active market,” said Shivantha Meepage, a research analyst at Acuity Stockbrokers. “There is high hope of Sri Lanka getting the IMF loan soon. Foreigners bought blue chips, while retail investors bought plantation and hotel shares.”

Analysts say foreign funds have been slow to come to the market, which has been driven higher by retail buyers on positive sentiments since the war ended on May 18.

High oil prices, which go along with synthetic rubber prices, and high tea prices had pushed up plantation shares, analysts said. Oil eased to around $71 a barrel on Monday, retreating from a near eight-month high last week.

Sri Lanka’s average total tea price has jumped around 22 per cent to 342 rupees in May, from January on high global demand. The bourse has risen around 20 per cent since the government declared victory in the 25-year war and is up 52.1 per cent so far this year on post-war optimism.

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