IMF assistance centre to be set up in India

New Delhi: The Cabinet has given approval to signing of an MoU with International Monetary Fund (IMF) for setting up of South Asia Regional Training and Technical Assistance Center (SARTTAC) in the country by the global body.

"It also authorised the Finance Minister to approve related decisions in respect of India's contribution for setting up of the centre, including Letter of Understanding for financial contribution by India, site of the SARTTAC, representative of India on the Steering Committee on SARTTAC, etc," an official statement said.

The SARTTAC will be a collaborative venture among IMF, the member countries, that include Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka, and development partners. Additional member countries could join SARTTAC at a later stage, the statement said.

"SARTTAC will also selectively cater to the capacity building needs at the state level, especially in India," the statement said. It noted that MoU will help in capacity building of government officials, including state level in macro, fiscal, monetary policies by the IMF and greater coordination between the six member countries of South Asia.

In a separate release, the government said the Cabinet has given its ex-post facto approval to the proposal for extension of the value date to March 8, 2016 of the Existing Currency Swap facility of USD 1.1 billion availed by Central Bank of Sri Lanka (CBSL) from Reserve Bank of India. The existing currency swap facility availed by CBSL from RBI was due to be paid by March 3, 2016.

"Approval of this proposal will provide a temporary relief to Sri Lanka till alternative arrangement is in place," the statement said. The Cabinet also gave its approval for providing a special swap of USD 700 million to Sri Lanka for a period of 3 months or till the time Sri Lanka avails the IMF facility whichever is earlier, the statement added.

Approval of this proposal shall help Sri Lanka in strengthening its economic stability and official reserves which have witnessed downward trend in 2015 owing to the adverse impact of the expected interest rate hikes in the United States.

"This will further foster India's bilateral relations and economic ties with Sri Lanka, which is India’s important partner in SAARC and South Asia," it said.