Colombo: Amid the acute financial crisis, Sri Lanka will be experiencing 10-hour daily power cuts from Wednesday. Other than that people are dreading day-long queues for fuel and anger is mounting over the worst economic crisis in living memory
The island country is lacking foreign currency unable to pay for vital imports, leading to dire shortages in everything from life-saving medicines to cement to food supplies.
Here’s The Lankan Crisis in 10 Points:
- Sri Lanka’s economy has been in a free fall since the COVID-19 pandemic due to the crash of the tourism sector.
- Sri Lanka’s currency has been also devalued by almost SLR 90 against the US dollar since March 8.
- Buses in Colombo sit idle while some hospitals have suspended routine surgeries.
- Exams were postponed this month because schools ran out of paper.
- Island nations facing a foreign exchange shortage which has led to a fuel, power and gas shortage and have sought the assistance of friendly countries for economic assistance.
- India provided more than $500 million in foreign currency swaps to strengthen Sri Lanka’s foreign reserves, taking the total up to $900 million.
- India also extended the repayment time frame for the $500 million debt of Sri Lanka under the Asian Clearance Arbitration.
- More recently on March 17, Sri Lanka signed a $1 billion credit line deal with India for the procurement of food, medicines and other essential items during Sri Lankan Finance Minister Basil Rajapaksha’s two-day visit to India.
- The International Monetary Fund (IMF) on Friday recommended a number of measures, including tax hikes, for macroeconomic stability in Sri Lanka and also to mitigate adverse impacts on the vulnerable and the poor.
- Sri Lanka’s Finance Minister Basil Rajapakse is scheduled to travel to Washington in April in order to seek IMF assistance to deal with the country’s economic crisis.