Dr. Coomaraswamy says Sri Lanka cannot use $ 1.5 billion Chinese exchange for IMF requirements

Sri Lanka can’t tap a $1.5 billion credit line from China as the Chinese are concerned the International Monetary Fund may force delays in repayment, a former Governor of the Central Bank of Sri Lanka (CBSL) said.

“There is a condition in relation to the months of import cover that we need to have in order to be able to draw on that money,” Dr. Indrajit Coomaraswamy, who is advising the Sri Lankan government, said at an event organized by the central bank Thursday.

It’s difficult for the Chinese to waive off the condition “because this is a three-year swap, it might be termed a loan and there may be pressure from IMF and others to include it in the stock of debt that we reschedule and therefore clearly that would be a disadvantage to the Chinese,” he was quoted as saying by Bloomberg.

“So it’s going to take some months, and given the fact that our reserves have gone toward almost zero, we need to find some ways of mobilizing,” Coomaraswamy was quoted as saying by Bloomberg.