ECONOMYNEXT – Sri Lanka has sought a loan from Qatar to import oil, Power and Energy Minister Kanchana Wijesekera has said, as an intermediate regime central bank crisis deepens.
Wijesekera who is in Qatar said in a twitter.com message that he met the Deputy Director General of the Qatar Fund for Development.
“Discussed possible Credit Line facility for Petroleum and Gas supply,” he said in the message. “Was informed that funds has been allocated for medical supplies and will consider the request for a credit facility and support the IMF program.”
Sri Lanka has a habit of borrowing foreign exchange to buy oil after the central bank prints money to mis-target interest rates.
The cascading policy error was started over 20 years ago by purchasing Iranian light crude on credit.
In later instances of money printing (currency crises) the CPC was made to borrow dollars from state banks until the loans became a threat to them.
CPC now also owes money to foreign oil suppliers.
Sri Lanka is now borrowing from India in the ongoing currency crisis.
Sri Lanka has a flexible exchange rate, perhaps the most dangerous monetary regime cooked up Western Mercantilists which is driven by conflicting money and exchange policy leading to frequent currency crises.
Sri Lanka is now in a deep monetary meltdown with the country scrambling for 6.0 billion US dollars in loans despite defaulting. (Colombo/June29/2022)