After a small delay of about a week the Executive Board of the IMF is to deliberate Friday on granting the second tranche of the US$ 2.6 billion standby arrangement to Sri Lanka, a senior official of the Central Bank told the Island Financial Review.

"The Executive Board of the IMF would meet in Washington Friday (early this morning in Sri Lanka) to consider granting Sri Lanka the second tranche under the standby facility," the official said.

"There was a slight delay of about a week or so because the evaluations had to be finalised and presented to the IMF Executive Board but we are very hopeful that we would receive the second tranche," he said.

The Central Bank expected the second tranche of the US$ 2.6 billion facility amounting to US$ 326.4 million by the end of October and analysts said the delay could have been caused by the IMF’s wait-and-see approach to the Vote-on-Account passed in parliament last Thursday for Rs. 362 billion government expenditure for the first four months of 2010 as elections are expected early next year.

"There is no such thing. There was just a slight delay because the IMF review team had to finalise their work," Chief Economist of the Central Bank K. D. Ranasinghe told The Island Financial Review.

The Central Bank announced last month that targets for the second tranche had been successfully achieved.

It said targets for foreign reserves, reserve money and government domestic borrowing for September 2009 had been comfortably met.

"The Net International Reserves (NIR) target was well exceeded with gross official reserves rising to US$ 4.2 billion (equivalent to 4.7 months of imports) by end September 2009," the Central Bank said.

"Reserve money was maintained within the targeted level of Rs. 280.4 billion, while Net Domestic Financing (NDF) at Rs.302.5 billion was below the ceiling of Rs.305 billion," it said.

The bank said the achievement followed the successful achievement of targets set for July 2009 as well.