17 February 2022 12:13 am Views - 527
| Gotabaya Rajapaksa |
| Prof. G.L. Peiris
|
Amid the ongoing foreign exchange crisis, President Gotabaya Rajapaksa has appointed three Cabinet Sub-Committees chaired by Foreign Relations Affairs Minster Prof. G.L. Peiris to lead negotiations with China, Japan and the Middle East, to secure imports of essential food items and export inputs.
“The Cabinet considered the need to identify alternative methods for importing essential food items, raw materials required for export-oriented industries and industrial goods,” the Government Information Department stated.
The Cabinet of Ministers has acknowledged the shortages of certain essential food items in the market. The exporters have also been struggling to secure raw materials for their exports, with the banking sector’s limited forex reserves being utilised to finance the imports of essential goods on a priority basis.
All three Cabinet Sub-Committees, which were appointed by President Rajapaksa with the approval of the Cabinet of Ministers, would be headed by Prof. Peiris.
Trade Minister Bandula Gunawardena, Industries Minister Wimal Weerawansa and Plantations Minister Dr. Ramesh Pathriana have been appointed to lead the negotiations with the country’s largest trading partner China, to secure essential food items and raw materials.
Health Minister Keheliya Rambukwella, Mass Media Minister Dullas Alahapperuma and Highways Minister Johnston Fernando have been appointed to lead the negotiations with Japan.
Sports and Development Coordination and Supervision Minister Namal Rajapaksa and Justice Minister Ali Sabry have been appointed to lead the negotiations with the governments of the Middle Eastern nations.
Sri Lanka has already secured US $ 900 million worth of credit lines from India and expecting to finalise another US $ 1 billion credit line in March. Further, the government is said to be negotiating with Pakistan and Australia for further credit lines.
The government and Central Bank have pinned their hopes on bilateral and multilateral funding lines, other credit lines and swap arrangements to ride the current crisis, largely caused by the pandemic and the sweeping tax cuts introduced in the latter part of 2019.
The Central Bank has said that Sri Lanka is trying to restructure its debt without the help of the IMF, using the local expertise available at the bank.
However, despite such efforts, Sri Lanka’s foreign reserves have continuously plummeted and as per the latest Central Bank data, the reserves stood at US $ 2.36 billion.
Sri Lanka has outstanding sovereign bonds amounting to US $ 12.55 billion, with US $ 1 billion of the bonds maturing in July. As for this year, Sri Lanka has foreign obligations to the tune of US $ 6.9 billion, including interest payments.