Sri Lanka trapped in a bad debt

Foreign Minister Susil Premajayantha has said that Sri Lanka's foreign reserves cannot be maintained by borrowing from the international community, which could lead to a worsening debt trap.

He points out that how to deal with short-term challenges and how to deal with long-term debt crises is a serious issue.

He made the remarks while commenting to the media on the foreign reserve crisis and new loans to China.

He continued to comment on this,

The country has no dollars to buy the fuel it needs, no foreign reserves to import baby milk, and no dollars to release containers stranded at the port.

There is a massive shortage of essential commodities in the country. We do not have foreign reserves to deal with these. We have to think about the amount of foreign reserves we have.

It is not possible to obtain loans and expose foreign reserves. We have only $ 1.5 billion in reserves. Now that number has risen to $ 3.1 billion through loans from China.

However, it is not possible to maintain our reserves by borrowing from other countries. The loans obtained have to be repaid with interest. So thinking of maintaining foreign reserves in debt is an adverse activity.

How are we going to handle the short-term challenges here? How we are going to deal with the long-term debt crisis is a serious issue. It will have to repay $ 6.2 billion in international debt next year.

These include international bonds worth two billion US dollars. Therefore, one should consider seeking the International Monetary Fund or other alternative programs to deal with these. He said any decision should be taken immediately.