Sri Lanka\\\'s new govt seeks $4.0 billion IMF bailout

COLOMBO, Feb 12 (AFP): Sri Lanka's new government will seek to borrow more than $4.0 billion from the IMF and other international lenders as it "restructures" expensive Chinese debt, the finance minister said on Thursday.
Ravi Karunanayake said he was travelling to Washington next week for talks with the International Monetary Fund (IMF) and the World Bank on securing support to boost reserves and finance investments in health and education.
"With the new government in place, there is a lot of international goodwill," Karunanayake said.
"We would love to have an enhanced programme with the IMF for balance of payments support."
Sri Lanka was expecting to tap the IMF for about $4.0 billion while additional funding was sought from the World Bank.
The previous IMF bail-out was $2.6 billion in 2009, when Sri Lanka faced a balance of payments crisis at a time when Tamil Tiger rebels were being crushed in a major military onslaught.
The minister said Sri Lanka would also talk to the World Bank about securing aid for projects relating to health and education.
Beijing, Sri Lanka's biggest lender in recent years, funded much of the country's post-war infrastructure driver under the previous administration of Mahinde Rajapakse.
Karunanayake said these loans had been granted on average at rates of between five and seven percent.
"In some cases, the interest rate on Chinese loans is as high as eight percent," Karunanayake said. "Where possible, we want to renegotiate and reduce the rate."
Sri Lanka's economy is among the fastest growing in South Asia, but the IMF last year warned the island was vulnerable to sudden external shocks due to high levels of foreign commercial borrowings.
Another report adds: The IMF and conflict-torn Ukraine have reached a preliminary deal on a new financial rescue plan worth $17.5 billion that could be a "turning point" for Kiev, IMF chief Christine Lagarde said Thursday.
In total, Ukraine will receive $40 billion (35 billion euros) in assistance over four years coupled with bilateral loans from other sources, Lagarde said, helping to stabilise Kiev's finances after 10 months of conflict in the east.
Talks have been under way in Kiev for days to reach an agreement on Ukraine's fourth IMF bailout in 10 years, with the last package in April 2014 failing to stave off financial crisis in the former Soviet republic.
"I am pleased to announce that the IMF team working in Kiev has concluded a staff-level agreement with the Ukrainian government on a new economic reform programme that would be supported by an extended fund facility of about $17.5 billion from the IMF," Lagarde told a news conference in Brussels.
The announcement came as leaders meeting at at marathon peace talks in Minsk announced a ceasefire deal aimed at halting the conflict.
Ukrainian Prime Minister Arseniy Yatsenyuk said Kiev was committed to the reforms demanded by the IMF.
"We anticipate, if the programme succeeds and Russian aggression stops, that the Ukrainian economy will start to grow in 2016," he told reporters.
"This four-year programme shows that Ukraine will stick during that time to the vital reforms necessary to stabilise the country's finances."
Ukraine economy struggling -
Ukraine's economy is in turmoil, with its currency the hryvnia losing 50 percent of its value in 2014 and the economy shrinking 7.5 percent, with another contraction of 5.0 percent expected this year.