The IMF endorsement on Sri Lanka while bringing in several steps to streamline the economy ensuring that the country does not face another economic crisis has also emphasised the need to enact new anti-corruption legislation. This is to harmonise it with the UN’s Convention against Corruption.
President Ranil Wickremesinghe also endorsed this and said on Thursday that his government in consultation with the IMF will bring the best Anti-Corruption Bill in South Asia to Parliament shortly.
The President said that the Cabinet already gave the green light for the Bill. The IMF also suggests publishing on a semi-annual basis about all significant Govt procurement contracts, a list of firms getting tax exemptions via the BOI, a list of individuals who are getting tax exemptions on luxury vehicle imports.
The IMF program will ensure that the central bank refrains from direct financing of the budget and unwinds its large stock of treasury securities, says. NDB Securities (Pvt) Ltd in a report.
“This will be monitored through a ceiling on the central bank’s net credit to the government.”
“Under the IMF program, monetary financing (money printing) could be provided only if there is a shortfall in budget support from multilateral development banks during the first six months of the program,” the report stated.
Commenting on the Financial Sector Stability the report stated that large state banks’ ‘fx debt’ to the government and SOEs are expected to be restructured or repaid in rupees.
CBSL will develop a roadmap for financial sector restructuring and recapitalisation (to address capital and FX liquidity shortages) by July 2023. The government will determine conditions for any potential use of public funds to support the roadmap and to close capital shortfalls at viable banks by October 2023.”
Report also says that the government will gradually lift some import restrictions. - SS