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Island crippled by 51 day crisis; we are committed to uplift economy: Premier Ranil Wickremasinghe in the House

PM Ranil Wickremesinghe 700 01

Premier Ranil Wickremasinghe has observed that the economy of the island nation has been crippled badly consequent to 51 day long crisis and that the government is fully committed to uplift the economy.

Prime Minister Ranil Wickeremasinghe made this observation making a Ministerial statement in Parliament on Thursday. During his address to the House, Wickremasinghe said:

"We are ready to rebuild the economy shattered by 51-day long crisis. It is not an easy task, but as Sri Lanka upheld people’s sovereignty and democracy overcoming all the challenges against them, we are confident that we can uplift the economy.

The rupee depreciated by 3.8 percent within the 51 days of the crisis while other currencies gained value. From October 26 to December 16, 2018, USD 312.9 million in Treasury Guarantees, USD 29.1 million in Treasury Bills and USD 29.8 million in Treasury Bonds flowed out of the country. We previously had a target of reaching USD 8 billion foreign reserves by the end of this year. We had USD 7,991 million foreign reserves as at October 26, but this had dropped to USD 6,985.4 million owing to the political crisis. As per the estimates, we need a total of USD 5,900 billion to pay for foreign loans and interests this year. Sri Lanka’s highest ever loan installment of USD 2,600 million is due on January 14. Our effort was to manage this debt in manner that it does not burden the ordinary masses. That is why we had made far-sighted plans, but now we have to start again."

All our mid-term plans stalled due to the political crisis. The political instability for 51 days dealt a severe blow to our economy which was gradually recovering. The economic growth stalled, the rupee further depreciated, Sri Lanka downgraded in international ratings and it failed to secure any aid or loan from any country or international monetary institution during that period. The government projects and programmes came to a standstill. The total damage to the economy is vast and it will take time to bounce back. We need to win back the confidence of the investors and international community. The political turmoil occurred just after Sri Lanka was named a best tourist destination. Some countries imposed travel bans on Sri Lanka and many foreigners cancelled their trips as a result. This deprived us a lot of foreign exchange.

We have taken action to stabilise the rupee. Many countries have agreed to help us. Reserve Bank of India has agreed to provide us $400 million as a part of a currency swap. India is also considering providing us an additional $ 1 billion. We expect to raise $ 500 million using Panda bonds and Samurai bonds. We are looking at raising an additional $ 1 billion from the international money market. The Minister of Finance will visit Washington next week to discuss this matter."

 

 

 

 

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