.Central Bank Governor Ajith Nivard Cabraal reiterated that the request to the International Monetary Fund (IMF) was nothing but routine.
The IMF will be helping Sri Lanka for a training and technical assistance mission on macro-fiscal capacity building for the newly established Macro-Fiscal Unit at the Finance Ministry he disclosed.
He was responding to Finance Minister Basil Rajapaksa’s revelation on Wednesday that Sri Lanka has in writing sought technical assistance from the IMF implying it was to get independent advice on the country’s economic issues including debt repayment and boosting foreign reserves.
In January the Finance Ministry had requested for a training and technical assistance mission on macro-fiscal capacity building for the newly established Macro-Fiscal Unit.
The IMF said its Fiscal Affairs Department jointly with South Asian Training and Technical Assistance Centre will be able to help Sri Lanka.
The training program is to expand on the basic forecasting and economic analysis tools provided in March 2021 to Sri Lanka and go into more debt on the development of a medium-term fiscal framework, present fiscal risk analysis tools and provide exercises on high level budget execution review.
This assistance however has no connection whatsoever to any financial support for Sri Lanka as there was no request from the government towards this end, official sources reiterated.
In a letter addressed to Finance Minister Basil Rajapaksa, Vitor Gaspar, Director IMF Fiscal Affairs Department stated that they will support the programme on Macro Financial capacity building as per the request made by the Finance Ministry.
The training programme will expand on the basic forecasting and economic analysis tools presented in March 2021 by the IMF Fiscal Affairs Department (FAD) _ South Asian Training and Technical Assistance Centre (SARTTAC), he elaborated in his letter, seen by the Business Times, to the minister,
It will go into more depth on the development of a Medium Term Fiscal Framework (MTFF), present fiscal risk analysis tools developed by FAD and provide exercises on high level budget execution review.
The technical assistance part of the mission will review and provide guidance on forecasting and economic analysis tools to be used by the MFU, the annual work plan and main output of the unit, the desired linkages to the budget process that needed improvements to macro and fiscal data compilation and staff capacity building and training needs.
Given the ongoing pandemic the assistance will be provided in virtual mode. The FAD team will be led by Holger Van Eden, Deputy Division Chief in FADs PFM division11 and includes Ms Lesley Fisher, Senior Economist; John Grinyer SARTTAC regional Micro fiscal advisor; Raju Sharan SARTTAC regional PFM advisor; Andrew Evans SARTTAC GFS advisor and Michel Marion FAD international expert.
The activity will be funded by the Government of Japan through the project to support IMF capacity development in the sphere.
The IMF will release a report on the outcome of the 2021 Article IV consultation with Sri Lanka following the staff team’s mission in Colombo during December 7–20, IMF’s
Sri Lanka mission chief Masahiro Nozaki said that the IMF has not received a request for financial support from Sri Lanka recently, but the staff stands ready to discuss options if requested,
Under Article IV of the IMF’s Articles of Agreement, the IMF holds regular bilateral discussions with all member countries to review economic developments and policies; following approval by IMF Management the IMF’s Executive Board discusses a Staff Report based on these discussions, he added.