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Sri Lanka Disaster:
Colombo Inventory Trade halted buying and selling from Might 10 2022. The change was halted for five days a month again as effectively. How did Sri Lanka basically and Colombo Inventory Trade specifically attain to this disaster?
The choice got here a day after Sri Lanka witnessed unprecedented violence and political disaster following the resignation of Prime Minister Mahinda Rajapaksa.
Sri Lanka is going through its worst financial disaster since gaining independence from the UK in 1948.
The Main Causes behind these have been:
1. The nation’s tourism sector – one of many greatest income mills for the financial system – had been impacted laborious by the 2019 serial bomb blasts throughout Colombo. The COVID pandemic worsened the state of affairs.
2. Sri Lanka had a foreign exchange reserve of simply $2.3 billion in February and exterior obligations near $7 billion – an enormous a part of them due in July.
3. The federal government’s transfer to ban chemical fertilizers in 2021 has led to a drop in rice crops this 12 months. After which farmers in Sri Lanka confronted a heavy disaster and due to this fact have been depending on authorities sanctions/help.
4. The nation is going through an enormous overseas debt because it owes over $ 5 billion to China alone. It additionally owes massive cash to India and Japan as of November overseas forex reserves of the nation have been simply $1.58billion.
5. Sri Lanka’s excessive dependence on imports for its important objects comparable to sugar, pulses, cereals and prescribed drugs has added to the troubles. Due to this fact there’s heavy meals inflation as effectively.
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