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HomeAsiaSri Lanka worst crisis: India to provide additional $500 million for fuel

Sri Lanka worst crisis: India to provide additional $500 million for fuel

On Wednesday, Sri Lanka’s foreign minister told reporters that India would contribute an extra $500 million in financial aid to help the country purchase gasoline and that Bangladesh is ready to postpone $450 million in swap repayments.

The IMF fund would take around six months to reach us, and it will be delivered in tranches,” stated Sri Lankan Foreign Minister G. L. Peiris. “Meanwhile, we’ll need to raise donations to keep our folks stocked up on necessities.”

Meanwhile, following the first fatality in weeks of turmoil over the government’s economic management, Sri Lankan police would conduct an “impartial and transparent” probe into skirmishes with protestors, the president announced on Wednesday.

Amid the most significant economic crisis in the country’s history, Sri Lanka’s state-owned oil corporation has raised gasoline prices.

On Tuesday, police used live bullets to disperse demonstrators in Rambukkana, northeast of Colombo, killing one person and injuring a dozen others.

Demonstrations have roiled the 22 million-strong South Asian island country for weeks, with residents enraged by shortages of petrol and other necessary goods and services like power outages.

10-hour blackouts, hospitals stop surgery as Sri Lanka crisis worsens, Sri  Lanka financial crisis

According to a media report made on Wednesday, despite the country’s unprecedented economic crisis, the World Bank is ready to grant emergency help to Sri Lanka and protect the country’s most vulnerable citizens.

Our neighbor country which is on the verge of bankruptcy, is experiencing unparalleled economic turbulence, the worst since the country gained independence from the United Kingdom in 1948.

The Colombo Gazette reported on Wednesday that World Bank Vice President Hartwig Schafer met with Sri Lankan Finance Minister Ali Sabry in Washington on Tuesday. Finance Minister Sabry is in the United States for the International Monetary Fund’s (IMF) and World Bank’s (WB) annual spring meetings. According to the report, Schafer said that they discussed steps to solve the economic crisis, help stabilization and recovery, and safeguard vulnerable individuals.

World Bank supports Sri Lanka with Fund. .

The Colombo Gazette reported on Wednesday that World Bank Vice President Hartwig Schafer met with Sri Lankan Finance Minister Ali Sabry in Washington on Tuesday.

Finance Minister Sabry is in the United States for the International Monetary Fund’s (IMF) and World Bank’s (WB) annual spring meetings.

Sri Lankan economy facing mounting challenges, public debt at  'unsustainable levels': IMF- The New Indian Express

According to the article, Schafer said that the World Bank is worried about the crisis’s effect on the poor and vulnerable. The bank stands ready to help with medications and health-related supplies, nutrition, and education.

In Washington on Monday, the Finance Minister met with the International Monetary Fund (IMF) and India’s Finance Minister, Nirmala Sitharaman.

According to the article, the IMF has praised the actions done by the Finance Minister to alleviate Sri Lanka’s current financial position.

The IMF said that it would support Sri Lanka as possible, and a good reaction has been obtained to speed up strengthening the help provided to the country.

Massive antigovernmental rallies are taking place around the country in response to the government’s inability to address the matter in question, which is the worst in history for Sri Lanka.

The population has been suffering for months due to long queues for gasoline, cooking gas, staples in very few supplies, and extended hours of power outages.

With the island country facing an economic crisis and a currency shortage, an Indian credit line of USD 500 million for fuel imports gave it a lifeline.

Following an earlier $ 500 billion line of credit in February to help Sri Lanka buy petroleum goods, India recently announced the extension of a USD 1 billion line of credit as part of its financial support to the neighbor to cope with the economic crisis.

President Gotabaya Rajapaksa has defended his government’s actions, claiming that the foreign currency issue was not his fault. The economic slowdown was caused mainly by a pandemic, declining tourist earnings, and inbound remittances.

IMF asks to restructure debt before the bailout

As antigovernmental sentiment grew throughout the island, the International Monetary Fund announced that it had requested Sri Lanka to “restructure” its massive foreign debt before a rescue deal could be finalized.

Sri Lanka met with the International Monetary Fund (IMF) in Washington after reporting its first-ever default on foreign debt.

The country is experiencing its biggest crisis since its independence in 1948, with a surge of demonstrations over food and gasoline shortages.

Sri Lanka's 'love–hate' relationship with the IMF | ORF

“When the IMF deems that a country’s debt is not sustainable, the government must take efforts to restore debt sustainability before receiving IMF loans,” said Masahiro Nozaki, the Fund’s country director.

“Adequate guarantees that debt sustainability would be restored would be need for approval of an IMF-supported program for Sri Lanka.”

The IMF said negotiations with Sri Lanka are still “early stage.” Still, it is a big question about the country’s economic predicament and its people’s suffering, especially the lower class, are experiencing.

The IMF warned that Sri Lanka’s $51 billion foreign debt was unsustainable earlier this year.

According to the IMF, Colombo’s current debt prevents the government from applying for emergency finance.

According to sources in the country’s finance ministry, debt restructuring would need creditors to accept a “haircut,” or a decrease in the value of their remaining assets, or agree to lengthier payback terms.

Nirmala Sitharaman has also asked the IMF to help Sri Lanka.

Nirmala Sitharaman | Kristalina Georgieva: FM Nirmala Sitharaman meets IMF  MD Kristalina Georgieva, highlights capex commitment

According to a Minister’s transcript, International Monetary Fund Managing Director Krisalina Georgieva “assured the Finance Minister that the IMF will continue to actively engage with Sri Lanka.”

According to the government, Finance Minister Nirmala Sitharaman has asked the International Monetary Fund (IMF) to help Sri Lanka. Colombo, which is in the midst of an unprecedented economic crisis and has stated that it would fail on $51 billion in foreign loans obligations, is requesting a $4 billion rescue package from the IMF this year.

According to a Finance Ministry summary of the conversation between her and IMF Managing Director, Krisalina Georgieva, Ms. Sitharaman “stressed that [the] IMF should support and offer financial aid as soon as possible to Sri Lanka.”

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