03/28/2009, 00.00
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Sri Lanka apprehensive over bailout package from the International Monetary Fund

The Central Bank of Colombo is intervening to halt the devaluation of the Sri Lankan rupee. The government is negotiating financing intended to revive the country's economy.

Colombo (AsiaNews) - In anticipation of a decision from the International Monetary Fund (IMF) on the 1.9 billion dollar loan requested by the government of Colombo, the Sri Lankan rupee (LKR) has been seesawing at the mercy of the financial markets.

The Central Bank of Colombo has intervened to halt the devaluation of the currency, which has been weakened by greater demand for dollars and by a selloff in shares of John Keells Holdings, the largest publicly traded company on the island, which in one day has seen trading valued at 1.9 billion LKR, equal to 12 million euros.

The future of Sri Lanka's currency and economy deepens on the decision of the International Monetary Fund. The government of Mahinda Rajapaksa is negotiating a bailout package with the IMF, intended to revive the country's economy.

The markets are awaiting an agreement, but Caroline Atkinson, head of the external relations department at the IMF, says: "We don't have any date as to the conclusion of those discussions or their likely bringing to the IMF Board, and we don’t have any information yet on how much Sri Lanka will be requiring from the Fund."

(Melani Manel Perera contributed to this report)

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