Business

Foreign reserves only $ 3 b, repayments $ 4.3 b: RW

  • $ 1 b bond payment end this month
  • $ 4.3 b due this year
  • Urges SL to go to IMF

In a statement addressing the current economic situation of the country, United National Party (UNP) Leader and former Prime Minister Ranil Wickremesinghe highlighted that Sri Lanka is mired in an economic crisis centred on a foreign exchange deficit and added that present foreign exchange reserves stand at $ 4 billion, which is expected to fall to $ 3 billion soon.

“After paying $ 1 billion in bond servicing in the middle of the year, the Treasury has only $ 3 billion in reserves left. In addition, the CPC (Ceylon Petroleum Corporation) is stuck with $ 1.3 billion in unpaid dollar bills,” he said.

Wickremesinghe further mentioned that the total amount of debt the country has to repay is $ 4.3 billion. He then asked the question of how the country is to service this debt when reserves stand at $ 3 billion.

“What will be left in the country’s Treasury when the country pays off the $ 3 billion and more than $ 1 billion in instalments before the end of the year?” he asked. According to him, a “known financial crisis” has been created in Sri Lanka.

“The Government imposed import restrictions as there was no money to import goods into the country. The farmer was told to buy organic manure. The Government is telling farmers to choose organic fertilisers due to the lack of funds for them to purchase non-organic fertilisers and for no other reason,” he alleged.

He also alleged that Sri Lanka’s commercial banks do not have any US dollars.

“There are no dollars in our commercial banks today. Our banks are in debt,” he said.

Attention was also drawn to the oil tanker that is currently docked at the Colombo Port, with Wickremesinghe stating that the Government is looking for dollars so that they can purchase this oil.

“We don’t have the US dollars to pay for an oil tanker that has docked at the Colombo Port. If you don’t pay dollars, this ship will take the oil that is due here,” he said.

Stating that even a small loan in the short term is not enough to get out of this crisis, Wickremesinghe said that if the Government does not have an alternative way of raising money, he suggests that it discusses with the International Monetary Fund (IMF) to find the money needed to sustain the country’s economy.

“Once we get the IMF certificate, we will be able to get money from countries like India, China, and Japan,” he said.

He also predicts that Sri Lanka’s unemployment rate will increase by the middle of next year, resulting in the increased hunger of Sri Lankan people. Stating that the current financial crisis is a serious issue, Wickremesinghe noted that he looks forward to hearing a debate in Parliament on the same.

“The financial affairs of the country are controlled by Parliament. The Central Bank and the Treasury operate under the Parliament and not above it. Therefore, I request that under the privileges of Parliament, a debate be held in regard to this matter,” he concluded.

Recently, Wickremesinghe urged the Speaker of Parliament to allocate a date to hold a debate on both the Covid-19 situation and the economic crisis in the country.