Sunday 3rd of March 2024

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Why did the countrys official foreign reserves collapse..?

2021-12-14 7704


This is how Sri Lanka became destitute when the Maldives, Pakistan and Bangladesh got through  


If the right decisions were taken at the right time, the country would not be destitute


Professor Prasanna Perera explained..!



Prasanna Perera, Senior Professor of Economics, Department of Economics and Statistics, University of Peradeniya has made a special note on his official facebook account on the factors that made the people of the country destitute while the country is being pushed towards bankruptcy due to the collapse of foreign exchange reserves.   

Answering the question as to why Sri Lanka's foreign exchange reserves are critically declining compared to similar economies such as the Maldives, Pakistan and Bangladesh, Professor Prasanna Perera’s note on his official facebook account is as follows.

Many media personal and colleagues repeatedly asked why Sri Lanka’s foreign exchange reserves are critical compared to peer economies such as the Maldives, Pakistan and Bangladesh. I discussed the matter with a few experts, and I thought of pointing out the following for anyone to understand;

(01) Sri Lanka has to serve more foreign debts and interests compared to peer economies.

(02) Sri Lanka has not requested IMF’ assistance at the correct time like Pakistan.  

(03) Sri Lanka has not been able to revive the tourism sector yet, whereas the Maldives has increased about 70% from the pre-pandemic situation. Remittances follow the same trend.  

(04) Ratings downgraded Sri Lanka and restricted the international financial markets. There is no FDI flow to Sri Lanka compared to peer countries. Would you mind adding more comparing Sri Lanka’ peers..?