Facebook icon
Twitter icon
e-mail icon

‘Trying all our options’ – As foreign currency dries up Sri Lanka looks desperate

Sri Lanka’s finance minister Basil Rajapaksa said Colombo was “trying all our options” to avoid defaulting on looming payments, as an economic crisis worsens on the island.

Speaking to the Financial Times, Rajapaksa said the government was “negotiating with everybody”.

“We have [international sovereign bonds] which we have to repay back, so we are negotiating with them,” he said. “Then we have creditors and we have to service their debt, so whether we can have an adjustment or some type of thing.”

Rajapaksa, another sibling of Sri Lanka’s president and prime minister, admitted the outlook was “very difficult because we have to pay this year $6.9bn and, additional to that, we have to find money for medicine, raw material, fuel, all these things”.

The prices of basic goods have soared in recent months, as Sri Lanka faces a dollar shortage and steadily rising inflation. With debts also piling and a host of repayments looming, the government is in a serious crisis.

Rajapaksa added that the government would also “think about a programme with the IMF,” adding “all those discussions are going as well”.

The prospect of going to the International Monetary Fund has been opposed by many within the government, but there seems to be few other choices left for the regime. Rajapaksa himself travelled to Delhi last year, as Sri Lanka sough Indian financial assistance in the midst of the crisis.

Last week, Sri Lanka repaid a US$500m bond. But another US$1bn is due in July and many fear that the state will have no foreign currency reserves by then.

Asked by the Financial Times if he was negotiating with bondholders, Rajapaksa replied, “something like that”.

“Obviously you can understand what we want and you can understand what the bondholders would like to have,” he added.

Read more from the Financial Times here.

We need your support

Sri Lanka is one of the most dangerous places in the world to be a journalist. Tamil journalists are particularly at threat, with at least 41 media workers known to have been killed by the Sri Lankan state or its paramilitaries during and after the armed conflict.

Despite the risks, our team on the ground remain committed to providing detailed and accurate reporting of developments in the Tamil homeland, across the island and around the world, as well as providing expert analysis and insight from the Tamil point of view

We need your support in keeping our journalism going. Support our work today.

For more ways to donate visit https://donate.tamilguardian.com.