World Bank offers prop for Sri Lanka's stressed banks
Add BT as a preferred source
THE World Bank on Friday (Nov 10) provided Sri Lanka US$150 million to underwrite savings of millions of depositors, in a move that highlights the bankrupt country’s financial fragility as it recovers from a crisis last year.
The country’s rupee currency plunged almost 50 per cent last year after the government declared bankruptcy and defaulted on its US$46 billion foreign debt.
Acute shortages of food, fuel and medicines led to months of violent protests that forced then-president Gotabaya Rajapaksa to step down and flee the country.
“Sri Lanka’s economic crisis highlights the need for strong safety nets to support the financial sector,” the World Bank’s country director Faris Hadad-Zervos said.
The money will go towards a deposit insurance scheme to protect small savers with less than US$3,400, who account for 90 per cent of deposits.
The economy is expected to contract in 2023, but it has stabilised since the crisis, with inflation falling below two per cent after peaking at nearly 70 per cent more than a year ago.
Colombo secured a 48-month US$2.9 billion bailout from the International Monetary Fund in March, but the latest installment of US$330 million has been held up since September as foreign debt restructuring remains inconclusive. AFP
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
TRENDING NOW
CSE Global independent director quits after clashes with chairman Eugene Lai over board refresh
What’s wrong with Orchard Road? Experts weigh in on the street’s cachet and its future
‘I felt like dying’: Thai Singha beer scion speaks up after disclosure of alleged sexual abuse
Rare brutalist Singapore house opens to the public before changing hands
