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Some thousands of years ago, most of the independent villages were economically. They produce everything that occupants need. But modern nations are rarely independent even though the world itself is now a village. They export their surplus. They produce and save foreign exchange reserves. And, they import to cover their shortcomings. The problem of Sri Lanka is currently not having enough money to buy what is needed from the outside world.
Sri Lanka has searched for $ 1 billion credit lines from India to cover essential imports, the Reuters news agency reported when the island nation fought through the worst economic crisis in decades.
This is an additional up to $ 1 billion of India has promised to guarantee Sri Lanka, which struggles to pay important imports including food and fuel.
The foreign exchange reserves have dipped 70 percent since January 2020. Sri Lankan foreign currency reserves fell to $ 2.31 billion in February fell $ 779 million from December 2021 to 2022 January.
It stops its imports that lead to acute shortages of several important items. The currency has experienced substantial devaluation. His business to find a generous global lender was not too successful.
The debt burden of Sri Lankan has become uncontrollable for the country if the right bailout package is not given to the country from financial institutions or international groups.Sri Lanka was obliged to pay a debt of around $ 7 billion in 2022. One of the debt of $ 1 billion in the form of international sovereignty bonds due in July.
