Page 2 - Sri Lanka

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IMF approves $3 bn in financial assistance for Sri Lanka to overcome crisis

The International Monetary Fund on Monday approved USD 3 billion in financial assistance to debt-ridden Sri Lanka to help it immediately overcome its economic crisis. IMF's Executive Board approved on Monday a 48-month extended arrangement under its Extended Fund Facility (EFF) with an amount of SDR 2.286 billion (395 per cent of quota or about USD 3 billion), according to a statement. Special Drawing Rights (SDR) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). Sri Lanka has been hit hard by a catastrophic economic and humanitarian crisis. The economy is facing significant challenges stemming from pre-existing vulnerabilities and policy missteps in the lead up to the crisis, further aggravated by a series of external shocks, the IMF said. The EFF-supported programme aims to restore Sri Lanka's macroeconomic stability and debt sustainability, mitigate the economic impact on the poor and vulnerable, safeguard financi

Sir Lanka's world-beating bonds pin hopes on IMF billions: Report

The nation's dollar bonds have returned 20 per cent this year, the top performers

IMF to approve $2.9 bn bailout package for Sri Lanka: Central bank governor

The IMF package will include budgetary support to Sri Lanka's government, which is a new element in IMF lending, he added

Sri Lanka govt debt rose to 115.2% of GDP by the end of 2022: Report

The Sri Lankan government's debt has risen to 115.2 per cent of Gross Domestic Product (GDP) by the end of 2022 from 104.5 per cent a year earlier, according to the latest national account estimates

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Lack of independence at Central Bank led to Sri Lanka's bankruptcy

The governor of the Central Bank of Sri Lanka Nandalal Weerasinghe has cited the lack of independence of the apex bank in determining the monetary policy as a reason for the country's unprecedented economic crisis. The Sri Lankan government in May last year declared a debt default on over USD 51 billion in foreign loans -- a first in the country's history. Weerasinghe made the statement on Thursday while talking about a proposed bill aimed to provide autonomy to the Central Bank without any undue influence from the fiscal authorities or the government. "In 2020, 2021 and 2022, the policy interest and exchange rates were fixed without the Central Bank," Weerasinghe said. The exchange rate was fixed at Rs 203 leading to the total loss of our reserves and bankruptcy, he said, recalling the situation prevailing at the time of his takeover last year from his predecessor Ajith Cabraal. He said it was important to let the Central Bank act independently to determine the policy interest ra

India continues to support debt-ridden Sri Lanka, distributes ration

India, under its 'Neighbourhood First' policy, has always come forward to help debt-ridden Sri Lanka, and in the latest instance has distributed the ration in Kalmunai, the Indian High Commission said

Sri Lankan unions end strike after President Wickremesinghe offers talks

Sri Lanka's state-sector trade unions on Wednesday called off their daylong strike to protest against the envisaged tax reforms after President Ranil Wickremesinghe pledged to give them an opportunity to discuss the issue with the IMF which has set this as a precondition for a crucial bailout package. The trade unions of doctors, ports, banks, electricity and teachers observed a day-long strike with the hope to convert it to a continuous protest action. They want the government to roll back the high personal taxes which the government had claimed was a necessity as part of the reforms demanded by the IMF to unlock the USD 2.9 billion bailout package. President Wickremesinghe's secretary Saman Ekanayake in a letter sent today to the doctors' trade union said: The Hon President has directed me to inform you that he wishes to continue the dialogue with the trade unions to resolve the issues An opportunity would be provided to the trade unions to discuss tax reforms with the IMF," he

South Asia gets back to reality

The crises in Sri Lanka and Pakistan raise questions about the relevance and costs of reliance on the alternative financial system provided by China's Belt and Road Initiative

Government workers in Sri Lanka stage protest over income tax hike

Sri Lankan health, railway, port and other state workers were on a daylong strike Wednesday to protest against sharp increases in income taxes and electricity charges, as the island nation awaits approval of an International Monetary Fund package to aid its bankrupt economy. Most government hospitals around the country suspended their outpatient clinics because doctors, nurses and pharmacists were on strike. The railways operated fewer trains and armed soldiers guarded carriages and train stations fearing sabotage. Trade unions say the increase in taxes and electricity charges have hit them hard amid difficulties from the country's worst economic crisis. They have threatened to extend the strike indefinitely if the government fails to address their demands. The government says it was compelled to raise taxes to strengthen state revenue and electricity charges to cover production costs, key prerequisites to unlocking the proposed USD 2.9 billion IMF package. Authorities say they ...

India secure WTC final berth after New Zealand beat Sri Lanka in thriller

India on Monday qualified for the prestigious World Test Championship (WTC) final after New Zealand defeated Sri Lanka by two wickets in a thrilling last-ball finish in the Christchurch game. India will play Australia in the WTC final at The Oval from June 7. This is India's second successive entry into the WTC final, with the previous one coming in the inaugural cycle in 2021, where they lost to New Zealand. With the Dimuth Karunaratne-led side's only shot at the WTC final berth hinging on a 2-0 victory against the Kiwis in the away series, the loss for the Islanders ended their hopes of securing a spot. Australia was the first team to secure a WTC final berth after humbling India by nine wickets in the third Test of the Border-Gavaskar series at Indore, leaving the hosts praying for a favourable result in the first Test between New Zealand and Sri Lanka. The result in Christchurch took the fourth Test of the Border-Gavaskar series in Ahmedabad out of the equation as earlier Indi

Sri Lanka uses Indian financial aid to buy textbooks for 4 mn students

Sri Lanka has used over USD 10 million from India's assistance of USD 1 billion to print nearly half of the textbooks for its four million young students, the Indian High Commission here said on Saturday. India announced a USD 1 billion line of credit to Sri Lanka last year as part of its financial assistance to help the country deal with its economic crisis. After an agreement to extend the line of credit was inked, Ministry of External Affairs (MEA) Spokesperson Arindam Bagchi had said India has always stood with the people of Sri Lanka and will continue to extend all possible support to the country. A concessional credit facility of USD 1 billion was extended to the Government of Sri Lanka by the Government of India in March 2022 for supply of essential items including food, fuel, medicines, industrial raw materials. Out of this facility, over USD 10 million has been used by SPC and private importers to procure printing paper and material from India, the High Commission here ...

Sri Lanka adopts first national action plan on women, peace and security

Battered by a series of crisis over the year, including war, Covid-19 pandemic and economic calamity, Sri Lanka adopted its first National Action Plan on Women, Peace and Security (WPS)

IMF board to consider approval of Sri Lanka's bailout package on March 20

The International Monetary Fund (IMF) has said that Sri Lanka has received financial assurances from all major bilateral creditors, Sri Lanka-based Daily Mirror reported

Sri Lanka secures China assurances to clear way for $2.9 bn IMF bailout

China has given assurances that it will support Sri Lanka's debt restructuring, clearing the biggest hurdle for the debt-ridden country to secure a much-needed USD 2.9-billion bailout package from the IMF, President Ranil Wickremesinghe said on Tuesday. In January, India strongly backed the island nation's efforts to secure a loan from the global lender to recover from its worst-ever economic crisis. Last night we received a new letter from the EXIM Bank of China. I and the governor of the Central Bank signed our letter of intent and sent it to the International Monetary Fund (IMF) last night itself," Wickremesinghe, who is also the minister of finance, told Parliament. Wickremesinghe said, our part of obligations are now complete and we hope the IMF will do their duty by the third or fourth week of this month, this will enable us to receive funding from the world bank and the ADB, he added. The IMF bailout process made slow progress due to the need to restructure Sri Lanka's nearl

A suggestion to the IMF on inflation

Standard policies towards inflation have not helped. It is important to think out of the box

Sri Lanka to hold election after getting Treasury's guarantee on funds

Sri Lanka's election commission on Monday said that the new date for the cash-strapped country's local election will be announced after receiving a guarantee from the Treasury on the funds required to hold it. The local body polls scheduled for March 9 were postponed due to a plethora of reasons linked to the country's current economic crisis. We have asked to meet the Treasury Secretary, the inspector general of police and the government printer," the chair of the independent Election Commission Nimal Punchihewa said on Monday. The new date will be announced with a guarantee from the Treasury on the money required to hold it. The meeting follows last week's order by the Supreme Court on the Secretary Treasury to release the budgetary allocation made for conducting of the poll for 340 local councils in the 2023 budget. The election to appoint new administrations to 340 local councils for a four-year term has been postponed since March last year due to the ongoing economic crisis.

India, Sri Lanka mulling over using Indian Rupee for economic transactions

India and Sri Lanka are exploring the possibility of using the Indian Rupee for economic transactions and have discussed the initiative that will help in building a stronger and closer partnership through trade and investment-led measures between the two countries. The High Commission of India here organised a discussion on the use of the Indian Rupee (INR) for transactions between India and Sri Lanka on Thursday. "Representatives from the Bank of Ceylon, State Bank of India and the Indian Bank shared their experiences and informed the audience that they had started carrying out INR-denominated trade transactions through respective Vostro/Nostro accounts after the creation of enabling framework by the Reserve Bank of India (RBI) and the Central Bank of Sri Lanka (CBSL) in 2022," the High Commission said in a statement. The participating banks also outlined the benefits of settlements denominated in INR which includes shorter timelines, lower exchange costs and easier availability of

EAM S Jaishankar, Ali Sabry discuss Sri Lanka's economic recovery

External Affairs Minister S Jaishankar on Saturday held wide-ranging talks with his Sri Lankan counterpart M U M Ali Sabry focusing on facilitating Sri Lanka's economic recovery as well boosting bilateral trade. India extended financial assistance worth around USD 4 billion to Sri Lanka, including lines of credit for purchases of food and fuel, last year when it was reeling under a severe economic crisis. New Delhi also provided guarantees to the International Monetary Fund (IMF) to help the country secure a USD 2.9 billion bailout package. "Nice to catch up FM @alisabrypc of Sri Lanka. Thank him for his #RaisinaDialogue2023 participation," Jaishankar said on Twitter. "We took stock of our cooperation that is focused on facilitating Sri Lanka's economic recovery. Discussions covered investment, trade and development partnership," he said. Sabry described the meeting as "constructive". "I met with @DrSJaishankar, Minister of External Affairs of India at Hyderabad House during my .