Sri Lanka foreign reserves dip below $ 50 million

Sri Lanka finance minister Ali Sabry on Wednesday waved a metaphorical red flag in parliament as the troubled nation's usable foreign exchange reserves dropped below $50 million, increasing worry over its ability to provide food, fuel and other essential goods for citizens, and repay massive foreign debts. Sabry warned 'we have been over-spending two and a half times'. "In 2021 total income was 1,500 billion (Sri Lankan) rupees… expenditure was 3,522 billion rupees… we were living (beyond) our means…" he said, cautioning lawmakers that aid from the World Bank or the IMF would not solve deep-rooted problems. "The IMF is not Aladdin's magic lamp," he said. 

Sabry has hailed India for its support during talks with the IMF. Addressing the Lankan parliament , Sabry - who led those talks - said he met Nirmala Sitharaman and that she had offered her government's support. Sabry's comments come a day after the main opposition party introduced a no-confidence motion against Rajapaksa for mishandling the country's economy. Sri Lanka is on the brink of bankruptcy and has suspended payments on foreign loans, which total over $50 billion with an estimated $8.6 billion due this year. Foreign exchange reserves were an estimated $2.31 billion in February. By March it had dropped to $1.93 billion. Overall reserves have crashed by 70 per cent in two years, Reuters reported.