By Uditha Jayasinghe
COLOMBO – Sri Lanka seeks to safe round $5 billion in funding this 12 months to cowl repayments for gasoline imports and different gadgets purchased via credit score strains, and one other $1 billion to bolster its overseas reserves, the prime minister’s workplace mentioned on Thursday.
The island nation is grappling with its worst monetary disaster in over seven a long time with a extreme overseas change scarcity that has left it struggling to pay for important imports together with meals, gasoline, fertilisers and medicines.
Sri Lanka’s overseas change reserves stood at $1.81 billion in April.
Prime Minister Ranil Wickremesinghe, who took workplace final month after mass protests pressured the resignation of his predecessor, has raised taxes to shore up authorities revenues and plans to chop expenditure sharply in an interim finances to be introduced inside weeks.
Sri Lanka can be negotiating a bailout bundle with the Worldwide Financial Fund, which may probably allow it to borrow at the very least $3 billion by way of the lender’s prolonged fund facility.
“He elaborated that discussions with the IMF are continuing and he was hopeful that negotiations would conclude by the top of the month,” Wickremesinghe’s workplace mentioned in a press release, referring to a dialogue between the prime minister and native chambers of commerce.
Wickremesinghe mentioned that any bridging finance would rely on Sri Lanka reaching an settlement with the IMF, the assertion added.
Up to now, Sri Lanka has obtained two credit score strains price $1.5 billion from India for gasoline and important imports. The neighbours are additionally in talks for one more $500 million credit score line to fund gasoline imports.
Sri Lanka can be asking different nations for assist, together with Japan, which has long-standing business ties with the island nation. Nevertheless, relations with Tokyo, which has additionally been a key lender to Sri Lanka, cooled after Sri Lanka in 2020 cancelled a $1.5 billion gentle railway mission that was to be largely funded by Japan.
“He (Wickremesinghe) added that relations with Japan had damaged down, and it might take some time to restore these relations and regain their confidence,” the assertion from the prime minister’s workplace mentioned.
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