Sri Lanka’s central bank governor regrets not immediately seeking IMF assistance because the country has run out of fuel.

India has made several shipments of gasoline and diesel to Sri Lanka on a $ 500 million credit line, with the last unit delivered this week. Energy Minister said Thursday that Colombo is awaiting official confirmation from New Delhi on another $ 500 million credit line for fuel imports.

Central Bank of Sri Lanka Governor P. Nandalal Weerasinge regretted the government’s decision not to seek early relief from the International Monetary Fund (IMF) and described it as a “mistake.”

Comments come in the country’s serious fuel crisis caused by the government’s inability to pay for food and fuel imports due to lack of foreign exchange reserves.

The government said Thursday that existing fuel inventories would only last for five more days.

“If we had previously decided to go to the IMF, if we started the debt settlement process a year ago, this kind of pain in this country, Mr. Weerasinge told the British Broadcasting Corporation (BBC). I could have managed the situation without it. ” In an interview on Thursday.

The Sri Lankan government, facing the worst economic crisis since its independence in 1948, in April suspend Payment of all external debt.

At the same time, Colombo has begun parallel negotiations with the IMF, with a delegation led by Treasury Minister Ali Sabri to negotiate with the World Bank and the IMF in April.

Last month, the IMF also conducted a virtual mission to Sri Lanka from May 9 to 24, taking into account the fuel, food and electricity shortages caused by the “balance of payments seriousness” problem.

“The team has made great strides in assessing economic conditions and identifying future policy priorities. The discussion focused on restoring fiscal sustainability while protecting the vulnerable and poor. To ensure the credibility of fiscal policies and exchange rates. Maintain the stability of the financial sector. Structural reforms to promote growth and strengthen governance. “

The IMF delegation will visit Sri Lanka on Monday.

One of the problems between the IMF and the Sri Lankan government is the restructuring of Colombo’s external debt to Beijing.

The IMF has a policy of disagreeing with the bailout package unless all lenders write down the loan.

Central bank governor China debt It accounts for 15 percent of Colombo’s total foreign borrowing. Sri Lanka has urged China to renegotiate the terms of its debt, in line with the IMF’s request.

“We are confident that China, as a good friend of Sri Lanka, will offer the same relief that other creditors offer,” said Wheelasinge.

Sri Lanka’s Chinese ambassador to China, Qi Zhenhong, met with Prime Minister Lanilwikramainha on June 14, guaranteeing Beijing’s “continuous and concrete support, including grants, trade and investment,” according to the Chinese embassy. did.

“Banks of China are also ready to negotiate with Sri Lanka to properly handle mature debt,” the embassy said. Sri Lanka’s central bank governor regrets not immediately seeking IMF assistance because the country has run out of fuel.

Back to top button