financial crisis in sri lanka (Sri lanka Crisis) After increasing, the situation is continuously getting uncontrollable. After increasing the financial crisis, the political crisis in the country has also deepened. First the cabinet had resigned, after which PM Rahe resigned. The situation in the country after PM’s resignation (Srilanka Current Situation) Became uncontrollable, people have taken to the road to protest. Now the army has to take over the command and has issued orders to shoot at the protesters at sight. You too must be seeing pictures of the protests happening in Sri Lanka every day and the deteriorating situation there, but do you know what is the reason for this situation.
If you also want to know what are the reasons for the situation prevailing in Sri Lanka today and due to which this situation has arisen. After this you will be able to understand how this crisis has arisen in Sri Lanka and which policies of the government can be held responsible for this…
Foreign debt is increasing continuously
Sri Lanka got independence from Britain in the year 1948 and after 74 years of independence it is considered to be the biggest financial crisis. Now inflation is also touching the sky here. If we talk about the reasons for this, then the first reason is the external debt of countries like China on Sri Lanka. According to a BBC report, critics believe that debt has increased significantly due to non-essential infrastructure projects. It is being told that Sri Lanka currently has a foreign debt of $ 51 billion.
low forex reserves
Along with this, the foreign exchange reserves are getting depleted continuously. Sri Lanka’s foreign exchange reserves declined 16.1 percent to $1.93 billion in March. A Bloomberg report shows that Sri Lanka’s debt payments have declined by an estimated $8.6 billion this year.
The corona virus epidemic is also being said to be responsible behind this situation in Sri Lanka. Actually, the travel industry was greatly affected during the corona epidemic and the corona epidemic is an important contributor to the economy of Sri Lanka. In such a situation, it has become very difficult to see. This sector has been affected a lot in the last year and due to this the foreign exchange has also come down significantly.
Apart from the epidemic and China’s debt, some internal matters are also responsible for this. According to the BBC report, President Rajapaksa had made a lot of announcements regarding the tax. He had drastically reduced the tax and due to this there was a huge shortage of currency with the government. Many critics consider this decision of the government to be very wrong and blame this decision for today’s situation.
Apart from this, the government banned the import of many things in the country. It also includes chemical food, which had a great impact on the crops. The result of this was that food items had to be ordered from outside also. Due to this, inflation increased a lot and the problem got worse.