Govt opts foreign finance repurposing to avert dollar crisis
The Government will soon adopt a short-term foreign finance mobilisation strategy of repurposing financial resources granted by international donors and the undisbursed loan balance of billions of dollars to maintain basic living standards of the people.
The total undisbursed loan balance of foreign financing and foreign financial resources available from the already committed loans for development projects that are to be utilised in the next 2-5 years, is estimated at US$ 7.95 billion, a Finance Ministry report revealed.
At least $5 billion is needed in the next six months to maintain basic standards of living of the people, including some $3.3 billion for fuel imports, while an additional $1 billion is required to strengthen the Sri Lankan rupee, Prime Minister Ranil Wickremasinghe told parliament on Tuesday.
The Ministry in collaboration with the Central Bank will hold a foreign donor conference under the leadership of India, China and Japan under the patronage of the International Monetary Fund (IMF) to reach a consensus on foreign finance restructuring and other related matters, a senior official said.
The bulk of the remaining funds under the recent projects are funded by the ADB (23 per cent or $1.84 billion), followed mainly by World Bank (19 per cent or $1.52 billion), China (17.2 per cent or $1.37 billion) and Japan (15.6 per cent or $1.24 billion) and the balance of around $ 2.1 billion by other donor countries.
Nearly 24 per cent of the foreign financing is expected to be disbursed during the next 2-5 years for the road and bridges sector while a considerable amount is to be disbursed mainly for sectors such as water supply and sanitation and transport, the report divulged. A portion of the remaining funds would be used for the import of food, fuel, LP gas and fertiliser.
Most of the donor funds harnessed are outright grants or long-term loans that carry low interest rates; a Treasury official said adding that restructuring these funds for the utilisation of meeting the urgent humanitarian needs of the people is an urgent need at present.