COLOMBO (Reuters) – Sri Lankan President Gotabaya Rajapaksa said on Wednesday he had decided to work with the International Monetary Fund to help solve the country’s economic crisis.
The Indian Ocean nation’s foreign exchange reserves have fallen 70% in the past two years to about $2.31 billion, leaving it struggling to pay for essential imports, including food and fuel.
“I have decided to work with them after examining the advantages and disadvantages,” Rajapaksa said in an address to the nation.
“We must take action to increase our foreign exchange reserves. To this end, we have initiated discussions with international financial institutions as well as with our friendly countries regarding repayment of our loan installments.”
He said the country was trying to reduce the trade deficit to $7 billion, and was expecting $5 billion in remittances to shore up state finances.
The president added that rising fuel costs was the most serious issue faced by his country.