Sri Lanka foreign minister meets China’s Wang Yi

ECONOMYNEXT – Sri Lanka’s Foreign Minister Ali Sabry has met Chinese Foreign Minister Wang Yi in New York on the sidelines of the United Nations General Assembly sessions.

“Had a productive discussion with Foreign Minister Wang Yi of #China,” Minister Sabry said in a message.

“We discussed bilateral ties and cooperation between multilateral agencies. Minister Yi assured that China will offer steadfast support to the Sri Lankan economic recovery.”

Sri Lanka is now in the grip of the worst currency crises triggered by its intermediate regime central bank in the process of trying to suppress interest rates with liquidity injections boost growth (target an output gap).

Sri Lanka defaulted on its debt and has to reach an understanding with official creditors to get final approval for a 2.9 International Monetary Fund program and make debt ‘sustainable’.

A debt sustainability sign off will also unlock loans from other creditors. Sri Lanka is now on the way to reach monetary stability after killing domestic private credit and is on the way to reducing credit to government through tax hikes and raising controlled prices of state enterprises. (Colombo/Sep25/2022)

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