According to Moody’s, an international credit rating agency, the resignation of ministers and officials has created uncertainty over Sri Lanka’s policies at a time Sri Lanka is facing a foreign exchange crisis and deficit as well as debt crisis.
They said tha the current political situation was hampering the process of obtaining money from major development partners as well as attracting foreign exchange and especially the withdrawal process will be severely hampered as Sri Lanka relied on capital inflows to settle foreign debt liabilities.
By the end of February this year, Sri Lanka’s reserves had dwindled to US $ 2 billion, a value well below the government’s annual debt repayments of US $ 6-7 billion, the agency said.
Moody’s says Sri Lanka’s reserves are not enough to cover two months’ worth of imports.
Moody’s has said that Sri Lanka will have to repay between US $ 6 billion and US $ 7 billion by 2025.
Sri Lanka’s inflation hit double-digit figures in November 2021, and further reaching upto 17.5 percent in February this year, according to a Moody’s report.
