Sri Lanka shuts three foreign missions as dollar crisis worsens
Sri Lanka has announced the closure of three overseas diplomatic missions in a bid to save foreign currency reserves, as the country’s Central Bank slaps tighter controls on dollars needed to finance essential imports.
The Sri Lankan High Commission in Nigeria and consulates in Germany and Cyprus will be closed from January in the restructuring, the Ministry of Foreign Affairs said on Monday.
“The restructuring is undertaken with a view to conserving the country’s much needed foreign reserves and minimising expenditure related to maintenance of Sri Lanka’s missions overseas,” the ministry said in a statement.
The island’s tourism-dependent economy has been hammered by the coronavirus pandemic.
In March last year, the government imposed a broad import ban to shore up forex reserves, triggering shortages of essential goods such as fuel and sugar.
The closure of the three missions came on the same day the Central Bank of Sri Lanka tightened restrictions on foreign currency remittances received by locals.
It ordered all commercial banks to hand over a quarter of their dollar earnings to the government, up from 10 percent.
This means banks will have fewer dollars to give to private traders who are importing essential goods.
Sri Lanka had foreign reserves of just $1.58 billion at the end of November, down from $7.5 billion when President Gotabaya Rajapaksa took office in 2019.
The Central Bank has appealed for foreign currency, even the loose change of people returning from overseas trips.
Earlier this month, ratings agency Fitch downgraded Sri Lanka due to mounting fears of a sovereign default on its $26 billion foreign debt.
The government insisted it can meet its obligations.
Food shortages have been worsened by the government’s ban on agrochemical imports, which was lifted last month after widespread crop failures and intense farmer protests.
(Source: AFP)
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Oh Sri Lankah!! I wish you could chew that non-aligned rubbish when you are going hungry now or squeeze it to extract some dollars! It is too late to be aligned with anyone now after the self-made mess by SL politicians trying to ‘balance’ by giving parts of the country and assets to this country and that country and borrowing since 1948mto subsidise in order to get votes. Chickens have come home to roost now. SL public is never capable of learning. Now give a landslide to the other side at the next election to usher to the economic haven in 5 years!! Bloody fools!!
Oh! My poor wounded country. he Central Bank has appealed for foreign currency, even the loose change of people returning from overseas trips. Need I say any more. Cram the book and pass few exams you stupide Sri Lankens.
SL government can stop looting the SL citizenships and give it back for a payment from those who do not renounce it when they get a second citizenship another (better, richer country always), as a good will gesture and ask those SL born individuals to deposit their wealth in SL banks with a guarantee that their money will remain as the same currency and will be available to withdraw after a certain agreed deposit period. That will swell the foreign currency reserves significantly. Even the most powerful countries do not do the filthy looting of citizenship of the country people are born in just because they have a second citizenship in a better country. Only the underdeveloped countries enjoy the practice to extract money.