Sri Lanka will not default on debt repayments despite forex crisis: Finance Minister

Sri Lanka will not default on its debt repayments in 2022 despite being faced with a severe foreign reserves crisis, finance minister Basil Rajapaksa has assured Parliament. Winding up the 2022 budget debate, Basil Rajapaksa, the youngest of the top three Rajapaksas running the country, also ruled out that Sri Lanka will seek a bailout from the International Monetary Fund (IMF).

"I will assure that every dollar that we have to pay will be paid," he assured the lawmakers.

He said the country was in a major foreign reserves crisis. "I admitted in my budget speech that we are in a serious situation.


Analysts say the island nation's foreign reserves had fallen to USD 1,587 million or one month of imports.

Rajapaksa said the government has to make a USD 500 billion debt payment in January 2022 and another billion dollars by June . "We have a plan to pay", Rajapaksa said responding to the Opposition lawmakers who had demanded the finance minister to reveal to the House how the government would face the unprecedented balance of payments crisis.

Rajapaksa said the government would slowly build up reserves through imports substitution.

He ruled out seeking an IMF bail out of the present crisis. He said an IMF team was in Colombo doing their routine reviews. "We are their members and we do some of their things", Rajapaksa said.

While Basil Rajapaksa, 70, is the finance minister, his eldest brother, Mahinda Rajapaksa, 76, is the Prime Minister and Gotabaya Rajapaksa, 72, is the President.