Sri Lankan minister hails India’s IMF aid as foreign exchange reserves fall to new low | world news


Sri Lanka on Wednesday hailed India’s support in talks with the International Monetary Fund over a bailout package to help the island nation weather the worst economic crisis in living memory. Addressing the Sri Lankan parliament, Finance Minister Ali Sabry – who led his country’s delegation to talks with the IMF and World Bank in the United States – said he had met his Indian counterpart, Nirmala Sitharaman, and that she had offered her support for rapid funding installation of the instrument (RFI).

Sitharaman said last month that India would “try to extend all possible cooperation” to Sri Lanka to help it out of this crisis. The Indian government has also spoken to the IMF on Sri Lanka’s behalf and the head of the global financial body, Kristalina Georgieva, later said she appreciated India’s help. India has also committed more than $3 billion in loans, lines of credit and swaps since January.

On Monday, Delhi granted another $200 million – on top of the previous two tranches of $500 million – of fuel to replenish Sri Lanka’s rapidly dwindling reserves. Sri Lanka also requested fertilizer today, as well as the deferral of $2.5 billion from the Asian Clearing Union.

Sabry, meanwhile, also briefed the Sri Lankan parliament on the dwindling cash reserves of the island nation, which have plunged below $50 million and reflect levels of immediate danger to the country.

Sabry – who quit his post on April 4, a day after being appointed, to return – warned the Sri Lankan government “we have spent two and a half times too much”. “In 2021, the total government revenue was only 1.5 trillion (Sri Lankan) rupees against expenditure of 3.522 billion rupees.”

“We as a country were living (above) our means…” he was quoted by the PTI, while warning lawmakers that the promise of financial assistance from the World Bank, the IMF or even India would not solve 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, which total more than $50 billion, including about $8.6 billion due this year alone.

The crisis has triggered a shortage of essential goods – food, fuel and medicine – and a spike in prices for what little is left on the shelves. It has also sparked violent clashes between police and furious Lankans demanding that the government led by President Gotabaya Rajapaksa be held accountable.

Sabry’s comments came a day after the country’s main opposition party – SJB – tabled a no-confidence motion against Rajapaksa for mishandling the country’s economy.

With the contribution of ANI, PTI


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