The island nation of 22 million people has been hit by power outages and power outages that have taken protesters to the streets and put President Gotabaya Rajapaksa under increasing pressure. “It’s a Herculean project,” Sambri said in his first interview since taking office this week, referring to $ 3 billion in funding as the country prepares to negotiate with the International Monetary Fund (IMF) this year. month. Sign up now for FREE unlimited access to Reuters.com Register The country will seek to restructure international government bonds and seek a moratorium on payments, and is confident it can negotiate with bondholders for a $ 1 billion payment ending in July. “The whole point is not to go bankrupt,” Sabry said. “We understand the consequences of a harsh bankruptcy.” JP Morgan analysts estimated this week that Sri Lanka’s gross debt service would reach $ 7 billion this year, with a current account deficit of about $ 3 billion. The country has $ 12.6 billion in outstanding international government bonds, according to central bank data, and $ 1.9 billion in foreign exchange reserves at the end of March. “The first priority is to see if we can return to the normal supply channel in terms of fuel, gas, drugs … and therefore electricity, in order to tackle the popular uprising,” Sambri said. The IMF said on Saturday that it had begun a technical commitment with Sri Lankan finance ministers and central bank officials on a loan program and that it was “very concerned” about the ongoing crisis. “We are committed to assisting Sri Lanka in line with our policies and will engage in discussions on a possible program with senior policy makers in the coming days and weeks,” Masahiro Nozaki, head of the IMF mission to Sri Lanka, told Reuters. “FEELING OF TRUST” Anti-government protests have been raging across the island for days, with at least one becoming violent in the commercial capital of Colombo, threatening the country’s lucrative tourism industry. Thousands of protesters gathered near the president’s beachfront office in Colombo on Saturday, making it one of the largest public rallies in recent days. Among the protesters were dozens of Muslims who sat in the middle of a blocked street to break the Ramadan fast and others who urged the president to resign with shouts of “Gotha (Gotabaya) go home.” Sabri said he would lead a delegation of Sri Lankan officials to Washington to begin talks with the IMF on April 18 and that economic and legal advisers would be selected within 21 days to help the government restructure its international debt. Ali Sabry, the newly appointed Minister of Finance, speaks during an interview with Reuters, in the midst of the country’s economic crisis in Colombo, Sri Lanka, April 9, 2022. REUTERS / Dinuka Liyanawatte read more “Once we get to them, the first thing is that there is a sense of confidence in the entire international monetary community that we are serious,” he said. “We are transparent, we are willing to get involved.” On Friday, a new central bank governor raised interest rates by 700 basis points unprecedented in a bid to tame sparking inflation and stabilize the economy. read more Sri Lankan authorities will also contact the rating agencies, Sabry said, as the country seeks to regain access to international financial markets after the lockout due to multiple rating downgrades by 2020. He said the government would raise taxes and fuel prices within six months and seek to reform loss-making state-owned enterprises. These measures were among the key recommendations in an IMF review of the Sri Lankan economy published in early March. “These are very unpopular measures, but these are things we have to do to get the country out of it,” Sambri said. ‘FRIEND OF ALL’ He said Sri Lanka would seek another $ 500 million fuel line from India, which would be enough for about five weeks. The government will also seek support from the Asian Development Bank, the World Bank and bilateral partners such as China, the United States, Britain and the Middle East. “We know where we are and the only thing is to counterattack,” Sabry said. “We have no choice.” Talks are ongoing with China on a $ 1.5 billion credit line, a syndicated loan of up to $ 1 billion and a request from the Sri Lankan president in January to restructure part of the debt. “Hopefully we can get some relief that would help … until bigger infusions come,” he said. Beijing and New Delhi have long struggled for influence on the island in southern India, with the country moving closer to China under the powerful Rajapaksa family. But in recent weeks, as the economic crisis deepens, Sri Lanka has relied heavily on aid from India. “We are a neutral country,” Sabry said. “We are friends of all.” Sign up now for FREE unlimited access to Reuters.com Register Report by Devjyot Ghoshal and Uditha Jayasinghe in Colombo. Editing by William Mallard, Jason Neely and Mike Harrison Our role models: The Thomson Reuters Trust Principles.
