Faced with its worst economic crisis in years, Sri Lanka on Tuesday said he was open to discussions with the monetary fund international (IMF) and other multilateral lenders for assistance.
Adding to its woes, the South Asian island nation’s inflation hit a record high for the fourth consecutive month, official data showed on Tuesday, putting further pressure on household income.
“Sri Lanka has repeatedly requested IMF assistance times in the past and we are always open to that option“said Cabinet Spokesman and Minister of Plantations, Ramesh Pathirana.
Sri Lanka’s foreign exchange reserves fell to $2.36 billion, hitting imports of essential goods, including fuel, and inflation is accelerating.
The island nation of 22 millions people also faces debt repayment obligations of about $4 billion this year, and opposition leaders and economists are pushing the government ask for help from people like of the IMF.
“We keep the lines of open communication with the IMF and other multilateral donors such as the Asian Development Bank,” Pathirana told reporters.
Some opposition MPs have also urged the government at the table in parliament an upcoming IMF assessment of the economy and financial situation, carried out within the framework of son regular Consultations under Article IV.
“It is essential that the government submit this document before parliament and clearly state their plan for make face to this crisis in sustainable way,” said opposition MP Harsha de Silva.
‘Hope and Pray’
With sufficient fuel stocks for Provisions for only a few days, Pathirana said the center bank had been ordered to release funds for fuel shipments.
Sri Lanka is trying to arrange a payment of 35 millions of dollars for a shipment of 40,000 tons of diesel, which would still only meet demand for on six days.
The fuel shortage is also hit power to supply, with the power regulator warning of five to six hours one day of rolling power load shedding cuts over the next a few days except thermal refueling power plants grow.
Pathirana said that any further increase in global oil prices would aggravate the situation more difficult.
“We hope and pray no war in Ukraine, car soaring oil prices will really hurt Sri Lanka,” he said.
Inflation hits record high
The index national Consumer Price Index (NCPI) in Sri Lanka increased by 16.8% in January of a year earlier, the fourth consecutive record rise and more than double October’s number of 8.3%.
the record the peaks came as the South Asian island struggles to find dollars to fund essential imports including food, fuel and medicine.
The Ministry of Energy announced Monday was struggling for buy fuel on credit and shortages reported at many pump stations, leading to queues and forcing some to shut.
The ministry said the main state-owned oil company, the Ceylon Petroleum Corporation (CPC), straddled with exceptional debt of $3.5 billion and was no longer able to raise new commercial loans.
However, the CPC relies on on a proposed line of credit of 500 millions Indian dollars government get oil in coming months, officials said.
The worsening economic crisis has already led to food rationing with quantity-limiting supermarkets of rice powder, sugar, lentils and canned fish sold to consumers.
Many pumping stations have also rationed fuel issued to motorists in the provinces.
that of Sri Lanka economy collapsed from the start of the pandemic, with a dive in tourism income as well as remittances from foreign workers.
International rating agencies downgraded Sri Lanka over expects it won’t be able to service its 35 billion foreign dollars debt. However, the government insists that he can fulfill his obligations.