Sri Lanka’s new president, Ranil Wickremesinghe, announced on Saturday that a possible loan deal with the International Monetary Fund is not expected to be concluded before September, which he attributed to the unrest in recent months, according to the Associated Press news agency.
In his first speech after being elected to the presidency by the parliament, Mr. Wickremesinghe stated that although when he was prime minister he intended to conclude an agreement with the IMF at the beginning of August, now its conclusion has been postponed for a month.
Mr Wickremesinghe took power after former President Gotabaya Rajapaksa, under whose days talks with Washington’s international financial institution began in April, was forced to flee the country and tendered his resignation on July 13 in the midst of a generalized civil upheaval.
The day before Friday, the Ministry of Finance announced that they resumed talks with the IMF after the new government took office and described them as successful.
Sri Lanka, formerly Ceylon, is experiencing the most serious political and economic crisis since its independence in 1948. The situation in the country cannot even be compared to the period of the barbaric civil war with the separatist Tamil Tigers, crushed by the army under leadership of Gotabaya Rajapaksa, a former military man, at the time as Defense Minister, in 2009.
The Asian nation has few dollars available for fuel imports, declared a default on its $51 billion foreign debt for the first time in its history, inflation hit 54.6% last month and was expected to climb even higher, while schools, public services and private businesses were closed to conserve fuel.
The crisis is mainly attributed to the new coronavirus pandemic, which crippled the tourism sector and drained the remittances of immigrants abroad. The Rajapaksa-promoted tax cuts blew a huge hole in state revenue, while a ban on chemical fertilizers also hit the primary sector before it was lifted.
About $12 billion of the island’s total foreign debt is held by private creditors.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
