Using yuan as a solution to the dollar reserve crisis: A loan worth 10 billion yuan to be obtained from China!

The government is currently facing a massive crisis of declining dollar reserves in Sri Lanka. Due to this, it was decided in the past to restrict the import of not only luxury items but also some essential items.

It was only a temporary solution and would require the repayment of $ 1 billion in international sovereign bonds in the future. Meanwhile, the dollar reserve deficit has worsened.

Meanwhile, Minister of State for Finance Ajith Nivard Cabraal said that they are considering the use of the yuan as a solution to the dollar reserve crisis. Cabraal said the yuan was recognized by the International Monetary Fund as a reserve currency.

Accordingly, a loan of 10 billion yuan is being prepared to be obtained from the Chinese government, which is approximately US $ 1.5 billion. 

The Minister further said that due to the increase in foreign borrowings during the period of the Yahapalanaya Government, Sri Lanka has had to allocate more foreign reserves to repay the relevant installments.

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