Sri Lanka

Sri Lanka’s new government plans to sell its national airline to stem losses, part of efforts to stabilize the nation’s finances even as authorities are forced to print money to pay government salaries, Bloomberg News reported. The new administration plans to privatize Sri Lankan Airlines, Prime Minister Ranil Wickremesinghe said in a televised address to the nation Monday. The carrier lost 45 billion rupees ($124 million) in the year ending March 2021, he said just days before the nation is set to formally default on foreign debt.

Ranil Wickremesinghe, a veteran lawmaker and former premier, has been named Sri Lanka’s next prime minister days after the last incumbent, the brother of President Gotabaya Rajapaksa, resigned in the face of escalating anger with the deepening economic crisis, Bloomberg News reported. The president’s media unit confirmed the appointment Thursday in a text message. No other details were immediately available. The announcement may bring a modicum of stability to the country, which is on the verge of bankruptcy and needs a government to lead bailout talks with the International Monetary Fund.

Sri Lanka’s central bank chief imposed more capital controls and threatened to resign if politicians fail to return stability to the nation in the grip of its worst economic crisis since independence, Bloomberg News reported. “I took on this responsibility with expectations that political stability will be established,” Governor Nandalal Weerasinghe said at a briefing in Colombo Wednesday. “It’s been more than a month with no progress.

Sri Lanka’s president declared a state of emergency Friday giving him broad authority amid widespread public protests demanding his resignation over the country’s worst economic crisis in recent memory, the Associated Press reported. The decree issued by President Gotabaya Rajapaksa invokes sections of the Public Security Ordinance that allow him to make regulations in the interests of public security, the preservation of public order, the suppression of mutiny, riot or civil commotion, or for the maintenance of essential supplies.

Sri Lanka remains deep in the throes of a balance of payments crisis that has crippled the country’s ability to import necessities and make payments on its over $30 billion in foreign debts, Sri Lanka’s finance minister said, WSJ Pro Bankruptcy reported. “Right now if you look at our usable liquid reserves, [they] are running next to zero, we just don’t have it,” the South Asian nation’s finance minister, Ali Sabry, said in an interview.

The World Bank has agreed to provide Sri Lanka with $600 million in financial assistance to help meet payment requirements for essential imports, the Sri Lankan president's media division said in a statement on Tuesday, Reuters reported. "The World Bank has agreed to provide $600 million in financial assistance to address the current economic crisis," the statement said. The World Bank would release $400 million "shortly", it said. According to the statement, the World Bank said it would continue to help Sri Lanka to overcome the current economic crisis.

The International Monetary Fund said on Saturday that its staff held "fruitful technical discussions" with Sri Lankan authorities on the crisis-wracked country's request for an IMF-supported loan program this week, Reuters reported. The Fund said in a statement that the discussions included the need for Sri Lanka to implement "a credible and coherent strategy" to restore macroeconomic stability, and to strengthen its social safety net and protect the poor and vulnerable during the current crisis.

The International Monetary Fund said discussions with Sri Lanka on a potential IMF loan program are at an early stage and any deal would require "adequate assurances" that the island country's debts can be put on a sustainable path, Reuters reported. In a statement emailed to Reuters, IMF Sri Lanka Mission Chief Masahiro Nozaki said that IMF Managing Director Kristalina Georgieva discussed lending options and policy plans with a Sri Lankan delegation on Tuesday.

Sri Lanka is barreling toward a “series of defaults” as it stops paying its foreign debts, Moody’s Investors Service warned in a downgrade of the country’s credit rating, Bloomberg News reported. The first default could come quite soon. The island nation was meant to pay about $78 million in interest to its bondholders on Monday -- until, of course, the government said last week it would halt foreign debt service to preserve cash for food and fuel imports. That has led rating companies to slash Sri Lanka further into junk, with Moody’s on Monday lowering its score to Ca from Caa2.

When Sri Lankan officials arrive in Washington this week to meet with the International Monetary Fund amid an economic and political crisis, the main question they’ll need to answer is how the country plans to manage its billions in debt, Bloomberg News reported. Sri Lanka is seeking up to $4 billion this year to help it import essentials and pay creditors. To get any of that through the IMF’s various programs, the government of President Gotabaya Rajapaksa must present a sustainable debt program.