Sri Lanka’s economy is facing the twin challenge of rapidly depleting foreign exchange reserves and rising inflation, which has pushed it to the brink of bankruptcy. Sri Lanka is also facing solvency issues with constant debt levels.
The basic needs of the people of Sri Lanka cannot be met due to the unprecedented shortage of foreign exchange. There are huge queues outside petrol pumps as there are no foreign exchange reserves to import petrol, pharmacies have run out of medicines while newspaper houses have run out of newsprint.
Inflation in Sri Lanka has crossed 18 per cent since January 2022. Angry residents took to the streets in protest and the Sri Lankan government responded by imposing a curfew.