Sri Lanka receives US$ 427 m IMF loan

The International Monetary Fund on Monday approved a $427 million loan for Sri Lanka, as part of its Stand-by arrangement for Sri Lanka.

The Washington-based lender said that Sri Lanka's economic recovery continued in 2011, but easy access to credit and a rigid exchange rate had helped extend long-running trade imbalances.

Last year's trade deficit hit nearly $10 billion, or a fifth of the country's GDP, imposing a massive strain on the country's dwindling foreign reserves and leaving the island exposed to external shocks.

Since end of war in May 2009 the IMF has lent Sri Lanka $2.13 billion in an effort to reform the country's economy and improve the government's budget in the wake of three decades-long ethic war.