WB rules out bridge financing to Sri Lanka, PM Ranil is FM also

Sri Lanka'sPrime Minister Ranil Wickremesinghe was appointed to hold a dual charge and run the finance ministry of the debt-ridden country on Wednesday by President Gotabaya Rajapaksa, an official statement said. Wickremesinghe, 73 was sworn in as the Minister of Finance, Economic Stability and National Policies. The five-time prime minister was re-appointed to the job on May 12 following the political circus precipitated by the unprecedented economic crisis in the island's history. He replaced Mahinda Rajapaksa who resigned to make way for his brother's plan to appoint an all-party interim government to handle the economic crisis. Wickremesinghe's office said during the two weeks he had been at the helm he had reestablished the island's foreign relations, taken steps for constitutional reform with the draft of the 21 amendments to the constitution, ensured fuel supplies and has been making preparations for an interim budget.Wickremesinghe took over at a time when street protests were raging against the government for its mishandling of the economy.

The island nation however is in need of USD 4-5 billion bridging finance to arrest the crisis where shortages of essentials had led to street rioting.Sri Lanka's economic crisis has created political unrest with a protest occupying the entrance to the president's office demanding his resignation continuing for the past 40 days.An inflation rate spiralling towards 40 per cent, shortages of food, fuel and medicines and rolling power blackouts have led to nationwide protests and a plunging currency, with the government short of the foreign currency reserves it needed to pay for imports..

Meanwhile, the World Bank has ruled out bridge financing or new loan commitments to crisis-hit Sri Lanka until the island nation's economy sets up an adequate macroeconomic policy framework, the global lender has said. The statement by the World Bank came on Tuesday following reports that the Washington-based institution was planning to support Sri Lanka to overcome the financial crisis in the form of a bridge loan or new loan commitments.However, the Bank has said that they are reshuffling the already allocated resources to provide essential medicines and other cash assistance to the vulnerable.We are concerned for the people of Sri Lanka and are working in coordination with the IMF and other development partners in advising on appropriate policies to restore economic stability and broad-based growth. Until an adequate macroeconomic policy framework is in place, the World Bank does not plan to offer new financing to Sri Lanka, it said.