On 03 June 2016, the Executive Board of the International Monetary Fund (IMF) approved a three year Extended Fund Facility (EFF) of SDR 1.1 billion (approximately USD 1.5 billion) for Sri Lanka to support the balance of payments (BOP) position and in support of the government’s economic reform agenda. This amount is equivalent to 185 per cent of the country’s current quota with the IMF. The first tranche under the EFF amounting to SDR 119.9 million (approximately USD 168.1 million) will be made available to Sri Lanka immediately. The remaining amount will be disbursed in six tranches over a period of three years, with the final tranche is expected to be disbursed in April 2019. The interest rate applicable on the EFF, the basic rate of charge is equivalent to the SDR interest rate, which currently stands at 0.05 per cent per annum, plus 100 basis points. Hence, the interest rate of the EFF facility is significantly lower than the prevailing market rates. The IMF is expected to conduct regular reviews of the country’s economic performance commencing November 2016.

Inflation, as measured by the change in the National Consumer Price Index (NCPI) (2013=100), which is compiled by the Department of Census and Statistics, increased to 4.3 per cent in April 2016 from 2.2 per cent in March 2016, on year-on-year basis. Food and Non Alcoholic Beverages; Alcoholic Beverages and Tobacco; Clothing and Footwear; Furnishings, Household Equipment and Routine Household Maintenance; Heath; Transport; Recreation and Culture; Education; Restaurants and Hotels and Miscellaneous Goods and Services sub categories contributed towards the year-on-year inflation in April.

The change in the NCPI measured on an annual average basis increased to 2.6 per cent in April 2016 from 2.4 per cent recorded in March 2016.