Sri Lanka in talks with IMF about possible bailout as nation-wide shutdown begins

Edited By: Sayan Ghosh
New Delhi, India Updated: Jun 20, 2022, 05:08 PM(IST)

The country is witnessing long queues at the gas stations, with people claiming to have waited for several days to fill their tanks. Photograph:( Reuters )

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The country has been experiencing fuel shortages, food shortages and record inflation and with the government holding talks with the International Monetary Fund after a possible bailout, it has become significant for the island nation to keep their existing reserves intact.

Sri Lanka has been experiencing its worst economic crisis since gaining independence in 1948 and the country started its two-week shutdown on Monday in order to preserve its already-depleting fuel reserves. The country has been experiencing fuel shortages, food shortages and record inflation and with the government holding talks with the International Monetary Fund after a possible bailout, it has become significant for the island nation to keep their existing reserves intact. As a result, the government decided to close all public sector offices and also instructed the teachers in all government schools to conduct online classes for the next two weeks at least.

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In the last couple of weeks, Sri Lanka has seen a number of protests and clashes between motorists and the police as fuel became scarce. There were huge queues outside petrol stations as the government said that they will be rationing the fuel reserves for the time being.

According to AFP, the schools in Sri Lanka were shut on Monday while few government offices functioned with bare minimum staffing. However, all hospitals and medical services were functioning as usual and there was normal activity in the main seaport of the capital Colombo.

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The current situation in Sri Lanka makes the talks with IMF even more important after the country defaulted on its US$51 billion foreign debt in April. The talks between the IMF and the government started on Monday and according to an AFP report, they will continue for 10 more days.

Prime Minister Ranil Wickremesinghe will also hold talks with Australian Home Affairs Minister Clare O'Neil to "deepen cooperation and assist Sri Lanka as the country faces very difficult economic times," according to an official statement released by the Australian government.

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