Sri Lanka will need about $3 billion in external support
within the next six months to help restore supplies of essential items,
including fuel and medicines and to manage a severe economic crisis, the
finance minister said on Saturday.

The island country with a population of 22 million people
has been suffering from prolonged power cuts, shortages of medicines, fuel and
other items, which brought angry protesters out on the street and put President
Gotabaya Rajapaksa under immense pressure.

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“It’s a Herculean task,” Finance Minister Ali
Sabry told Reuters in his first interview since taking charge this week,
referring to finding $3 billion in bridge financing as the country prepares for
negotiations with the International Monetary Fund (IMF) this month.

According to Reuters, Sri Lanka plans to restructure international sovereign bonds and seek a moratorium on payments and is confident of negotiating with
bondholders for an upcoming payment of $1 billion in July.

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Sabry said that the entire effort is not to go for a hard
default. “We understand the consequences of a hard default,” he

According to JP Morgan analysts, Sri Lanka’s gross debt
servicing would be around $7 billion this year, with the current account
deficit amounting to $3 billion.

Sri Lanka will look for another $500 million credit line
from India for fuel, which would be adequate for around five weeks of demands,
Sabry said.

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The government is also eyeing some support from the Asian
Development Bank, the World Bank, and bilateral partners including China, the
United States, Britain and countries in the Middle East, reported Reuters.

Sri Lankan authorities have asked for a $1 billion loan
from China to meet the existing repayments to China, and a $1.5 billion credit
line to purchase Chinese goods.

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Sri Lanka’s new
central bank governor, Nandalal Weerasinghe, emphasized the importance of
working closely with the International Monetary Fund (IMF). To expedite funding
for the country, Sri Lanka will send a strong team to the Spring Meetings of
the IMF and the World Bank, he said. The central bank will appoint legal and
financial advisors for debt restructuring within two weeks.