Sri Lanka on Wednesday tightened import restrictions, banning more than 300 additional items. Because the economic crisis that caused months of shortages and overthrew the president refused to ease.
After Gotabaya Rajapaksa stepped down in July, his successor, Ranil Wickremesinghe, banned the sale of goods such as home appliances, tools and sporting goods.
With a population of 22 million, this South Asian island nation suffers from acute shortages of many essential commodities due to lack of foreign exchange.
The new ban came despite the central bank’s announcement last week that the foreign exchange shortage was easing thanks to better inflows.
However, the bank said the Sri Lankan economy is expected to contract by a weaker-than-expected 8.0% this year, with inflation projected to reach a record high of 65% by September.
Foreign currency shortages forced Sri Lanka to default on some of its $51 billion external debt piling up in April.
An International Monetary Fund delegation was scheduled to continue talks with Sri Lankan officials on the bailout on Wednesday.
But IMF assistance could be delayed if Sri Lanka’s biggest creditor, China, refuses to restructure some of its loans.
Beijing has not publicly moved away from its proposal to issue more loans rather than haircut existing credit.
Workers’ remittances, a major source of foreign exchange for Sri Lanka, fell by more than 50% to $1.6 billion in the six months to June compared to the same period last year.
Rajapaksa, 73, fled to Singapore after months of protests culminated in July when demonstrators stormed his official residence. According to his party, he has since flown to Thailand, but he hopes to return home.
