Sri Lanka’s usable foreign exchange reserves have fallen below $ 50 million

Sri Lanka’s finance minister, Ali Sabry, waved a metaphorical red flag in parliament on Wednesday as the troubled country’s usable foreign exchange reserves fell below $ 50 million, raising concerns about its ability to provide food, fuel and other basic necessities for citizens and repay huge foreign debts. .

Sabry – who resigned on April 4, the day after the appointment to return – noted that we spent twice and a half. “In 2021, the total income was 1,500 billion (Sri Lankan) rupees … the expenditure was 3.522 billion rupees … we lived (through) our own resources …” he said, warning lawmakers not to help the World Bank or the IMF. solved deep-rooted problems.

“The IMF is not Aladdin’s magic lamp,” he said.

Sri Lanka is on the verge of bankruptcy and has suspended payments on foreign loans totaling more than $ 50 billion, with $ 8.6 billion expected to fall due this year.

Foreign exchange reserves were estimated at $ 2.31 billion in February. By March, it had fallen to $ 1.93 billion.

Total reserves fell 70 percent in two years, Reuters reports.

Last week, the World Bank announced it would provide $ 600 million in aid to help Sri Lanka meet payment requirements for substantial imports.

The Sri Lankan crisis will continue for at least another two years, the government says

Sri Lanka will have to endure its economic hardships for at least two more years, the country’s finance minister said, noting the imminent financial crisis.

“People should know the truth. I don’t know if people are aware of the seriousness of the situation,” Finance Minister Ali Sabry said.

“We will not be able to resolve this crisis in two years, but the measures we will take today will determine how long this problem will drag on.”

Public anger has sparked ongoing protests demanding the resignation of the government.

“Replace the unrealistic budget, expand World Bank assistance”

Sri Lanka intends to replace its current “unrealistic” budget and is in talks with the World Bank to expand its support by $ 300 million to $ 700 million, the country’s finance minister said.

The island nation, hit hard by Covid-19 and after a steep tax cut by President Gotabaya Rajapaksa’s government, which is short of revenue, is critically short of foreign exchange and has sought emergency help from the International Monetary Fund.

Incredible inflation and shortages of imported food, fuel and medicine have sparked weeks of protests that have occasionally escalated into violent ones.

(Only the title and image of this report may have been redesigned by Business Standard staff; the rest of the content is automatically generated from a syndicated source.)

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