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Business News/ News / World/  Sri Lankans seek refuge in India as country battles worst economic crisis. Key points
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Sri Lankans seek refuge in India as country battles worst economic crisis. Key points

Around $6.9 billion of Sri Lanka's debt needs to be serviced this year but its foreign currency reserves stood at about $2.3 billion at the end of February

Sri Lanka ordered troops to petrol stations as sporadic protests erupted among the thousands of motorists queueing up daily for scarce fuel (AFP)Premium
Sri Lanka ordered troops to petrol stations as sporadic protests erupted among the thousands of motorists queueing up daily for scarce fuel (AFP)

Sri Lanka is currently facing its worst economic meltdown since independence in 1948, with crippling shortages of essentials and fears it will default on its foreign debt or ask bondholders to take a "haircut" on repayments.

Around $6.9 billion of Colombo's debt needs to be serviced this year but its foreign currency reserves stood at about $2.3 billion at the end of February.

The island nation had about $3.5 billion in debt from China by end-2020, excluding loans to state enterprises, according to central bank data.

Amidst hardships and sufferings, its nationals have started fleeing to India. 

Check latest developments:

  • Six Sri Lankan nationals who allegedly entered India illegally and were left stranded at mid-sea were rescued on Tuesday and being interrogated by the Coast Guard. Among the six, three children were present as they attempted to land at Dhanushkodi by a boat. A woman among them said they had crossed over to India following the economic crisis in Sri Lanka.
  • The Coast Guard said it had located the Lankan nationals from fourth island, Rameswaram following receipt of "illegal migration of Sri Lankan nationals to India."
  • Sri Lanka posted soldiers at hundreds of state-run gas stations on Tuesday as shortages forced tens of thousands of people to queue for hours. Tension over the scarcity of supplies has fed sporadic violence among those scrambling to buy fuel and other essential items.
  • The decision to deploy troops near petrol pumps and kerosene supply points came after three elderly people dropped dead during their wait in long queues.
  • Sri Lanka has cancelled exams for millions of school students as the country ran out of printing paper. "School principals cannot hold the tests as printers are unable to secure foreign exchange to import necessary paper and ink," the department of Education of the Western Province said.
  • The cash-strapped nation has secured a billion-dollar credit line from India to buy urgently needed food and medicine, news agency AFP reported last week. India and Sri Lanka formally entered into the credit agreement on last Thursday during finance minister Basil Rajapaksa's visit to New Delhi, as per reports. 
  • The latest loan was on top of another $500-million Indian credit line to help its island neighbour buy oil.
  • The Indian line of credit came a month after Sri Lanka purchased 40,000 metric tonnes of diesel and petrol from India's oil major Indian Oil Corporation to meet the urgent energy requirements.
  • The International Monetary Fund on Friday confirmed it was considering President Gotabaya Rajapaksa's surprise Wednesday request to discuss a bailout. "We will discuss with the authorities how best we can assist Sri Lanka going forward," IMF spokesman Gerry Rice said in a statement. 
  • China’s ambassador to Sri Lanka on Monday said his country is considering up to $2.5 billion in fresh assistance to the South Asian nation. The ambassador, Qi Zhenhong, told reporters in Colombo on Monday that China is considering a $1 billion loan and a $1.5 billion credit line to purchase goods from China, both of which would be new lines of financing.

 

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Published: 23 Mar 2022, 04:22 PM IST
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