Sri Lanka’s external reserves fell to US$ 2.36 billion by the end of January 2022 from US$ 3.14 billion by the end of last year, it is enough for less than 2 month’s worth of imports.
Sri Lanka has so far resisted assistance of International Monetary Fund (IMF) to bolster its reserves position and restructure its debt. Instated the government has placed its faith on a home-grown fix based on expedited bilateral and multilateral funding lines to overcome the economic difficulties.
The government settled foreign currency loans and funded essential imports, while taking receipt of a US$ 400 million currency swap and a US$ 500 million debt deferment from India.
Sri Lanka up to now has received US$ 900 million worth of financial assistance from India and is expecting further US$ 1 billion in March to facilitate essential imports such as food and medicines from that country.
Sri Lankan sources said it is discussing further credit lines from Pakistan, Japan and Australia.
In the three months from February to April, Sri Lanka has another US$ 1.83 billion foreign currency obligations to settle, while a billion dollar sovereign bond falls due on July 25.