Govt will pay US$ 500mn, US$ 1,000 mn loan installments in January, June - Minister | Daily News

Govt will pay US$ 500mn, US$ 1,000 mn loan installments in January, June - Minister

Finance Minister Basil Rajapaksa said he will ensure the payment of the US$ 500 million loan installment due next January and the US$ 1,000 million loan installment due in June will be made and that there is no need to worry about it.

The Minister said this during the first discussion of a series of discussions with the Minister organised by the Government Information Department on the ‘Budget-2022’ on Saturday (13).

The Minister said that although the foreign reserves have dwindled, measures are being taken to repay the loan installments. He said however that the current reserves are not the country’s earnings, but the current reserves are loans given by other countries.

However, he assured that by 2027 he would ensure that the country has its own stable foreign reserves.

“The amount of foreign exchange we earn is less than the amount of foreign exchange we spend.

We need more remittances than we currently have for the fuel and raw materials this country needs as well as medicines and food. There are several ways of earning foreign currency and a main source of remittances is the money our people remit through foreign employment. Almost every country in the world either provides services to other countries or obtains services from another country. It’s nothing to hide. It is happening all over the world. ”

He noted that the second method of earning foreign exchange is through the tourism industry. “This too happens all over the world where people either visit other countries as tourists or countries attract tourists from other countries. In some countries, both.”

“The other method of receiving foreign remittances is export and re-export. It is also linked to the issue of imports. When we import, our country’s foreign reserves are spent on payments. Recently, our trade balance has been at a disadvantageous level. That is, the balance of payments was higher,” he added.

The Finance Minister said that due to the COVID pandemic, some avenues of foreign inflow collapsed. “The over 4.5 billion per year tourism trade came to a standstill. The foreign employment income flowing into the country from overseas also stopped this year. However, due to these incomes, we were able to survive last year. We are looking for ways to rectify this situation. Yet, we are not receiving the expected funds. Even the countries that granted us loans are now trying to resolve their own issues. As a result, obtaining loans is also not as easy as before. Further, we are also not receiving any grants either. In fact, under these circumstances, those willing to invest in our country has also reduced.”

He said that this is a situation that has been festering for many years and had aggravated over the past two years. He admitted that while several measures were taken to overcome these difficulties, there was no favourable outcome. Minister Rajapaksa predicted that these difficulties will persist through the next year as well, adding that the government intends to overcome these obstacles without obtaining additional loans.

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