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Sri Lanka – Concerns over a financial crisis owing to inability to repay debts

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Sri Lanka – Concerns over a financial crisis owing to inability to repay debts

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The economic situation in Sri Lanka is experiencing its worst recession ever, after government debt constituted the highest proportion of Asian dollar bonds this year, as Sri Lanka received a currency swap line worth $ 1.5 billion from China last March, raising concerns about the government’s inability to repay its debts. Member of Parliament of Colombo District, Mr. Mujibur Rahman, said that the Sri Lankan government’s dependence on China to provide financial facilities and not resort to the International Monetary Fund generated a crisis inside the country, the most important of which is the drop in foreign reserves to 2.9 billion dollars, the high cost of living, and the occurrence of food crises.

Meanwhile, Member of Parliament and former Minister, Professor TissaVitharana, stressed that the general perception of the majority is that China is trying to advance its agenda at the expense of national interests in Sri Lanka, stressing that any foreign power uses all means, whether economic, political or cultural, to impose its authority in the country.

Sri Lanka is trying to find a way out in several ways, especially with the re-emergence of Covid-19 cases threatening its tourism sector, as it must cover at least $2.5 billion in bonds due before the end of July 2022, including $1 billion in bonds due two months ago.

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