Sri Lanka has dropped plans for another $1 billion loan from the International Monetary Fund following disagreements over how the money should be spent, AFP quoted the central bank as saying.

The IMF usually extends loans to cover countries’ difficulties in meeting foreign exchange obligations, but Sri Lanka wanted to spend the loan at home.

The Sri Lankan defence secretary Gotabhaya Rajapaksa told governments in the West to "engage constructively" with the Sri Lankan government.

Speaking at a seminar organised by the Lakshman Kadiragamar Institute for International Relations and Strategic Studeies and the Pakistan High Commission, Gotabhaya Rajapaksa said:

India’s Minister of State in the Prime Minister’s Office V Narayanasamy has stated that India will support a resolution against Sri Lanka at the United Nations Human Rights Council, if the country refuses to honour any recommendations put forward by the world body.

Speaking to reporters, Narayanasamy said,

Police in Sri Lanka have arrested a young female tourist from the Netherlands for having a tatto of the Buddha on her back, reported Ceylon Today.

A new alliance against the ruling UPFA has been formed in Sri Lanka.

The opposition parties, led by the UNP, have signed an MOU to form a joint movement in Colombo.

The alliance, called “Vipakshaye Virodhaya” includes the UNP, TNA, Democratic People’s Front, Nawa Sama Samaja Party, Mawbima Janatha Pakshaya, Ruhunu Janatha Party, Eksath Janatha Peramuna, Muslim Tamil National Alliance and Nidahase Wedikawa.

The Commonwealth Secretary General Kamalesh Sharma held talks with the government on Sunday on the rule of law and the separation of powers.

In a statement the Commonwealth said:

"Sharma is expected to discuss, among other issues, options for advancing Commonwealth values and principles, including the independence of the judiciary and the separation of powers,"

The Jaffna home of an Indian consulate official was ransacked on Friday reports the Hindu.

It is reported that the Sri Lankan Army keeps close watch on the consulate officials and that issues of intimidation have arisen.

While a video player and some money were taken from the premises, the house was raided thoroughly seemingly with the intention of a specific search.

Sri Lanka's Permanent Representative to the UN in Geneva, Ambassador Ravinatha Aryasinha has said that Sri Lankans living abroad should “contribute towards moderating the negative narratives propagated against Sri Lanka – by clarifying genuine concerns and debunking the falsehoods", reported the Daily Mirror.

The Sri Lankan government is hoping for the EU GSP+ trade concessions that were stripped from the island to return, after an estimated US$1.5 billion loss due to the withdrawal, reported the Sunday Leader.

The government is alleged to be preparing an application to handover to the European Union for June 2014, where they will be re-applying for the trade concessions, the loss of which has seen factories leave the island.