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Sri Lanka's central bank ignores cash request for fuel as economic crisis worsens

Sri Lanka's power regulator had sought USD $150 million from the Sri Lankan central bank, in order to import fuel for the next two months but no response has been received forcing power cuts of over 7 hours. 

The public utility Commission of Sri Lanka (PUCSL) said President Gotabaya Rajapaksa had also instructed the central bank to provide the necessary foreign exchange but it had not happened. 

“We have given a number of proposals to the government and cabinet to solve the power crises but the advice not been taken in to consideration,” PUCSL Chairman Janaka Ratnayake said in a statement.

“The power crisis that has come from the fuel crisis is due to the wrong financial management. That is to say, unwise use of foreign exchange. Priority should be given for fuel." he added.

Sri Lanka faces an acute foreign exchange crisis, which has led to shortages of food, medicine and fuel across the island. Farmers across the island have been impacted too with many unable to harvest crops due to the lack of fuel available for their equipment.

Last week Indian Oil Corp (IOC) has agreed to supply gas oil, gasoline and jet fuel to Sri Lanka amidst the deteriorating economic crisis. IOC has agreed to extend a $500 million line of credit (LOC) offered by the Indian government to assist with the growing fuel and diesel issue. Exim Bank facilitated the Line of Credit agreement. Exim Bank, to date, has extended 10 lines of credit to the Sri Lankan government on behalf of the Indian government, taking the total value of LOCs extended to $2.18 billion.

Read more at EconomyNext

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