For months, Sri Lankans have lined up to buy fuel, cooking gas, food and medicine, most of which comes from abroad and is paid for in hard currency. The fuel shortage caused rolling power cuts lasting several hours a day.
Sri Lanka will need around $3 billion in external aid over the next six months to help restore supplies of essential items, including fuel and medicine, Finance Minister Ali Sabry told Reuters . “It’s a Herculean task,” Sabry said in his first interview since taking office this week, referring to seeking $3 billion in bridge funding as the country prepares for negotiations with the Monetary Fund. International (IMF) this month. The country will seek to restructure international sovereign bonds and seek a moratorium on payments, and is confident it can negotiate with bondholders over a $1 billion payment due in July.
Meanwhile, Sri Lanka’s central bank moved to raise interest rates by an unprecedented 700 basis points to rein in high inflation amid the worst economic crisis that has led to protests across the country and has put President Gotabaya Rajapaksa under increasing pressure to resign. The move comes as Sri Lanka’s main opposition party, the SJB, announced it would table a no-confidence vote against President Rajapaksa’s government and is prepared to remove the beleaguered leader if he fails. not respond to the concerns of the public facing difficulties due to the economic crisis. crisis.