Economics
Sri Lanka Is Running Out of Money for Imports as Delta Rages
- Government has enough foreign exchange for 2 months of imports
- Investors see more rate rises as central bank fights inflation
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Sri Lanka’s dwindling foreign exchange reserves risk spiraling into a crisis that could force the South Asian nation to tighten policy more aggressively and seek an International Monetary Fund bailout.
After meeting a $1 billion debt repayment in July from reserves, the government had only enough dollars to cover less than two months of imports. The nation buys wheat, sugar and milk powder from abroad and, with the Sri Lankan rupee down 7.3% this year, the import bill is soaring, stoking inflation and raising concerns about panic buying and hoarding.