The visit comes days after the Treasury Department announced on Tuesday it would suspend repayments of foreign debt
The visit comes days after the Treasury Department announced on Tuesday it would suspend repayments of foreign debt
A Sri Lankan government delegation travels to the US on Sunday to work with the IMF to secure a $4 billion package desperate to bail out the country’s struggling economy, which is currently suffering from a severe foreign exchange crisis.
The delegation, led by newly appointed Finance Minister Ali Sabry, will hold talks with the International Monetary Fund (IMF) on April 19-24.
Mr Sabry has said Sri Lanka is seeking a $4 billion bailout from the IMF after previously fighting calls to seek a facility from the global lender.
The visit comes days after the Treasury Department announced on Tuesday that it was suspending repayments of foreign debt, including bonds and government bonds, pending the completion of a loan restructuring program with the International Monetary Fund (IMF). Sri Lanka had to pay off $7 billion in debt this year.
This was Sri Lanka’s first default in its history since 1948, and the country’s 22 million people are facing debilitating 12-hour power outages and extreme shortages of food, fuel and other essentials such as medicines.
The Securities and Exchange Commission of Sri Lanka (SEC) announced Saturday that the Colombo Stock Exchange will remain temporarily closed for a week from Monday to allow investors to gain “greater clarity and understanding” of current economic conditions in Sri Lanka of the crisis Sri Lanka that would help them “make informed investment decisions”.
Sri Lanka is facing its worst economic crisis since independence from Britain in 1948. The economic crisis also sparked a political turmoil in the island nation, with citizens holding off nationwide street protests for weeks over protracted power outages and shortages of fuel, food and other essentials and demands the overthrow of President Gotabaya Rajapaksa.
Earlier this month, the entire Sri Lankan cabinet – with the exception of President Gotabaya and his older brother, Prime Minister Mahinda Rajapaksa – resigned from their posts after thousands of people defied a nationwide state of emergency and curfew and joined street protests by the government denounced.
According to sources, President Gotabaya has made arrangements to swear in a smaller cabinet shortly. There will be no member of the Rajapaksa family other than Prime Minister Mahinda.
President Gotabaya had sacked his brother and Finance Minister Basil Rajapaksa earlier this month and invited opposition parties to join a unity cabinet to quell angry public anger at the hardships caused by the economic crisis. The opposition rejected the offer to form a unity cabinet. The opposition will table a motion of no confidence in the government next week.
A $500 million Indian credit line for fuel imports has offered the island nation a lifeline in the face of acute foreign exchange shortages.
India recently announced it would provide a US$1 billion credit line to Sri Lanka as part of its financial support to the country to deal with the economic crisis, following a US$500 billion credit line earlier in February for the purchase of Petroleum products had been provided.
President Rajapaksa has defended his government’s actions, saying the foreign exchange crisis was not his fault and the economic downturn was largely pandemic-related, as the island nation’s tourism revenue and foreign remittances fell.
