Sri Lanka is facing a severe foreign exchange crisis, says finance minister

Sri Lanka is facing a severe foreign exchange crisis after the pandemic hit the island nation’s earnings from tourism and remittances, Finance Minister Basil Rajapaksa said.

The government’s revenues were also far short of target as pandemic curbs hurt economic activity, Rajapaksa said during a debate in parliament Tuesday. The country is under an extended lockdown amid a record rise in Covid-19 deaths and hospitalizations caused by the delta variant.

The deteriorating reserves position prompted S&P Global Ratings to last month cut Sri Lanka’s rating outlook to negative. That helped stoke concerns the nation won’t be able to service $1.5 billion of