Sri Lanka targeting $5 bn this year for repayments: PM Wickremesinghe

Sri Lanka's PM Ranil Wickremesinghe explained that the government was targeting $5 billion for repayments and $1 billion to bolster the country's reserves

Sri Lanka's newly appointed Prime Minister Ranil Wickremesinghe, during a meeting with representatives from the Joint Chambers on Thursday, explained that the Government was targeting USD 5 billion for repayments and USD 1 billion to bolster the country's reserves.

During the meeting, Wickremesinghe elaborated that discussions with the International Monetary Fund are proceeding and was hopeful that the negotiations would end this month.

He further explained that the debt restructuring has already begun, following the appointment of financial and legal advisors.

Sri Lanka's Prime Minister said that any bridging finance to help in alleviating the crisis is dependent on an agreement with the IMF being reached.

Commenting further, Prime Minister Wickremesinghe stated that talks were continuing with donor nations. He added that relations with Japan had broken down, and it would take a while to repair those relations and regain their confidence.

In regards to the medicine shortage, the Prime Minister explained that former Maldives President Mohamed Nasheed, who was appointed on May 19 to coordinate the relief efforts for the island nation, was leading the international appeal for urgently needed medical supplies.

Addressing the issue of food scarcity, the Prime Minister explained that securing fertilizer and compiling a food security program were being given equal priority. He explained that in the event of any excess crops, those would be provided to vulnerable groups at a concessionary rate.

Meanwhile, on Wednesday, Sri Lanka relaxed the import restrictions on 369 items in March and April this year.

Sri Lankan Prime Minister Ranil Wickremesinghe, in his capacity as the Minister of Finance, Economic Stabilization and National Policies, has issued a gazette notification on the relaxation, the Ministry said in a press statement.

Earlier, those who wanted to import any of the 369 items had to obtain an import licence, and the decision to restrict the import was taken to reduce foreign currency spending on foreign products.

Sri Lanka is facing its worst economic crisis since independence with food and fuel shortages, soaring prices and power cuts affecting a large number of the citizens, resulting in massive protests over the government's handling of the situation.

The recession is attributed to foreign exchange shortages caused by a fall in tourism during the COVID-19 pandemic, as well as reckless economic policies, like the government's move last year to ban chemical fertilizers in a bid to make Sri Lanka's agriculture "100 per cent organic".

Due to an acute shortage of foreign exchange, Sri Lanka recently defaulted on the entirety of its foreign debt amounting to about USD 51 billion.