COLOMBO: Sri Lanka, which is in a standoff with the International Monetary Fund over exchange rate policy, will not draw the remaining $800 million of the global lender's $2.6 loan due to the high interest rate, Central Bank Governor Ajith Nivard Cabraal said on Monday.
"If we do not draw any further money, we will have to pay only a 1.1 percent interest rate for the entire loan. But otherwise for the entire $2.6 billion loan, we will have to pay at 3.1 percent," Cabraal told Reuters in a telephone interview.
"That is why we thought it is better for us to not to take any money."
Sri Lanka has already received $1.8 billion of the loan in seven tranches since July 2009, but the IMF has withheld the eighth tranche since September after the central bank failed to allow flexibility in the rupee exchange rate.
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