Washington, Dec 8 (AFP) The International Monetary Fund today approved the release of USD 251 million to Sri Lanka, the latest payment of a three-year loan that had been delayed amid differences over the scope and pace of reforms.

The IMF approved the USD 1.5 billion loan in June 2016 following a balance of payments crisis in Sri Lanka.

With this latest tranche it has released a total of USD 760 million.

While noting the progress on reducing Sri Lanka’s deficit, the fund said more progress will be needed, including on tax collection and beefing up foreign reserves.

“It is important to build on the progress made and accelerate reforms to further reduce fiscal and external vulnerabilities,” Deputy Managing Director Mitsuhiro Furusawa said in a statement.

He pointed to the country’s high debt burden and the weak performance of state-owned enterprises, as well as the need for the central bank to continue to lean towards raising interest rates as long as inflation remains a threat.

This payment was expected to be approved early this year, but officials in Colombo said there were differences with the IMF over tax reforms and monetary policy, as well as reforms to state companies. (AFP)

This is published unedited from the PTI feed.