Economic crisis in Sri Lanka: usable foreign exchange reserves are now less than 50 million dollars
Sri Lanka’s Finance Minister Ali Sabry waved a metaphorical red flag in parliament on Wednesday as the struggling nation’s usable foreign exchange reserves fell below $50 million, heightening concern over its ability to provide food, fuel and other essentials to citizens, and to pay off massive foreign debts. .
Sabry – who resigned on April 4, a day after being appointed, to return – warned “we have spent two and a half times too much”. “In 2021, total income was 1.5 trillion (Sri Lankan) rupees…expenditure was 3.522 billion rupees…we were living (above) our means…” he said, warning legislators that help from the World Bank or the IMF would not solve deep-rooted problems. 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, which total more than $50 billion, including $8.6 billion due this year.
Foreign exchange reserves were estimated at $2.31 billion in February. By March, it had fallen to $1.93 billion.
Global reserves have fallen 70% in two years, Reuters reported.
Last week, the World Bank announced it would provide $600 million in aid to help Sri Lanka meet payment requirements for essential imports.
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