Oil shortage in Sri Lanka, foreign exchange crisis

Sri Lanka is in a foreign exchange crisis This has led to currency fluctuations and has affected the flow of essential commodities such as food, medicine and fuel, which has led to International Monetary Fund (IMF) For help. The country’s inflation rate, which was 17.5 percent in February – the highest since 2015 – is suffering.On March 17, India extended $ 1 billion loan service to Sri Lanka.

Over the past two years, the exchange rate has shrunk by 70 percent to $ 2.31 billion. And the country will have to repay nearly $ 4 billion in debt for the rest of this year, including the $ 1 billion global sovereign bond that will grow in July.

Sri Lanka is struggling with a foreign exchange crisis that has led to currency devaluation and imports of basic necessities such as food, medicine and fuel, and has turned to the IMF for help. The country’s inflation rate, which was 17.5 percent in February – the highest since 2015 – is suffering.

The country is heavily dependent on imports because it is almost entirely dependent on imports such as sugar, pulses, grains and pharmaceutical products.

According to local media reports, areas with the largest population, such as Colombo, are experiencing a shortage of oil and gas.

Year-on-year food inflation rose from 24.4 percent in February to 24.7 percent in February, and non-food inflation rose from 10.2 percent in February to 11 percent in February. Inflation was 16.8 percent in January.

In response to complaints of accumulated and inefficient distribution, the military is currently holding hundreds of government-run gas stations to distribute fuel. Three elderly people were reportedly killed while waiting in long queues at petrol pumps and kerosene stations.

Occasional clashes between people rushing to buy fuel and other necessities due to a shortage of supplies are taking place in many parts of the country.

Ahead of an IMF speech in Washington in April, the government said it would hire an international law firm to provide technical assistance in debt restructuring.

Due to a shortage of cooking gas, people have switched to kerosene.

The country’s tourism sector, the main source of foreign exchange during the Covide-19 epidemic, was hit hard. Borrowing from China to finance infrastructure projects has led to a worsening of debt.

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