New Delhi, India: India has consistently stepped up to assist debt-ridden Sri Lanka as part of its “Neighborhood First” policy, according to the Indian High Commission in Colombo. In this most recent instance, New Delhi distributed the ration in Kalmunai.
The Indian High Office in Colombo posted on Twitter, saying, “@IndiainSL continues to assist needy sections! Hints of Kalmunai’s ration allocation.”
The cash-strapped nation announced its first-ever debt default in April after public unrest was caused by the nation’s worst economic crisis since it gained independence from Britain in 1948 due to currency shortages. The island nation entered a financial crisis as a result of the Covid-19 pandemic’s impact on tourism, which is said to be the country’s economic backbone and a decline in remittances from citizens who were working overseas.
The crisis worsened as a result of the war in Ukraine, as import costs, notably those of fuel, shot up as a result of surging inflation. India promised to assist the debt-ridden nation in this predicament. Sri Lanka’s request for a bailout will be discussed at the IMF Executive Board meeting on March 20; if accepted, the first tranche of the facility will be released shortly.
President Wickremesinghe of Sri Lanka promises creditors of openness and equitable debt restructuring.
Ranil Wickremesinghe, Sri Lankan President, has reassured the nation’s official bilateral creditors that the country will resolve its economic crisis with openness, fair treatment for all creditors, and an equitable burden-sharing arrangement for all restructured debt.
Weerasinghe added that the central bank and the finance minister would jointly decide on the appropriate level for the inflation objective and that it would be prioritised in the new legislation.
Once the new legislation is implemented, Sri Lanka will also eventually establish a separate company to raise money to settle its national debt, taking that responsibility away from the central bank, Weerasinghe said.