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Sri Lanka to use US$ 1bn from foreign reserves to pay loans
View(s):Sri Lanka will use US$ one billion from its foreign reserves to pay foreign debts later this year amidst the growing financial crisis created by the COVID-19 pandemic, the Treasury has decided.
A senior Treasury official said that in the wake of reduction in revenue, foreign remittances and issues in obtaining foreign loans, the funds would be used marking a drop of foreign reserves to US$ six billion from the existing US$ seven billion.
At the beginning of the year, foreign reserves stood at US$ 7.5 billion and dropped to the current US$ 7 billion.
“We may have to make use of the reserves further within the year to pay up other loans also,” he said.
The moves came as the government was negotiating with China to delay its loan repayments after a successful negotiations with India to delay repayment of installments of a loan of US$ one billion .
Talks were also underway with the World Bank and the IMF to reschedule loan payments.
Last year the Government repaid foreign loans amounting to US$ 4.8 billion.