The World Bank has agreed to provide Sri Lanka with 600 million US dollars in financial assistance to help meet payment requirements for essential imports. Sri Lankan President’s media division said in a statement yesterday that the World Bank would release 400 million dollars “shortly”. According to the statement, the World Bank said that it would continue to help Sri Lanka to overcome the current economic crisis.
Sri Lanka’s worst financial crisis since independence in 1948 was caused by a drastic drop in its reserves that dropped 70 percent over the past two years, hitting 1.93 billion dollars at the end of March. This left Colombo struggling to pay for essentials, including fuel, medicines and food.
Earlier this month, Sri Lanka kicked off talks with the International Monetary Fund (IMF) for financial assistance. Before the IMF finalises a programme for Sri Lanka, the country needs 3 to 4 billion dollars in bridge financing to help meet its essential expenses.
India has helped Sri Lanka by assisting with 1.9 billion dollars. Sri Lanka’s Finance Minister Ali Sabry said Colombo would also seek assistance from the Asian Development Bank.
The Sri Lankan government has also appealed to multiple countries and multilateral organisations for bridge financing until the IMF comes up with its aid.
In a related development, Sri Lanka has announced that it would sell long-term visas to attract foreign currency after the island nation ran out of dollars to pay even for food and fuel. Foreigners who deposit a minimum of 100,000 dollars locally will be granted permission to live and work in Sri Lanka for 10 years under the “Golden Paradise Visa Program”, the government said.
Thousands of people remained camped outside President Gotabaya Rajapaksa’s seafront office to demand his resignation.
Trading at the Colombo Stock Exchange was halted three times on Tuesday as prices plunged, with the blue-chip S&P index closing down 9.75 percent.