The forthcoming July 31 will be a decisive day for Finance Minister Basil Rajapaksa as Sri Lanka is required to repay loan installments amounting to US $ one billion by the end of this month.
Economic analysts expressed views that this would be a very crucial time for Sri Lanka as the country is facing a severe shortage of US dollars to repay loans and that the ensuing situation would further aggravate Sri Lanka’s economic woes.
Basil will have to face a huge challenge as the country’s foreign reserves have tumbled to just US $ 4 billion which is basically sufficient to cover the import expenses for nearly two and a half months.
Most of the analysts are of the view that Sri Lanka will have to obtain more loans to repay these loans which will create a vicious circle for the country’s economy.
Basil’s ability to handle the debt crisis will determine his success as the Finance Minister and as well as his political future.