Sri Lanka's president, who had announced he would resign Wednesday, has fled the country after months of turmoil culminated in protesters converging on the presidential palace. Here's what's happening in Sri Lanka.
Sri Lanka's president, who had announced he would resign Wednesday, has fled the country after months of turmoil culminated in protesters converging on the presidential palace.
The Finance Ministry says Sri Lanka has only $25 million in usable foreign reserves. It needs $6 billion to stay afloat over the next six months. In April 2021, Rajapaksa suddenly banned imports of chemical fertilizers. The push for organic farming caught farmers by surprise and decimated staple rice crops, driving prices higher.
So far, Sri Lanka has been muddling through, mainly supported by $4 billion in credit lines from neighboring India. An Indian delegation was in the capital Colombo on June 23 for talks on more assistance, but Wickremesinghe warned against expecting India to keep Sri Lanka afloat for long. Some of the policies that contributed to economic damage have since been reversed, including the 2019 tax cuts and last year's chemical fertilizer import ban, but it will take time before any effects are evident.“Sri Lanka pins last hopes on IMF,” said a recent headline in the Colombo Times newspaper. The government is in negotiations with the IMF on a bailout plan and Wickremesinghe said June 22 that he expected to have a preliminary agreement with the IMF by late July.
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