Sri Lanka to hire global law firm to aid debt restructuring -official

People queue to buy kerosene at a fuel station in Colombo
People stand in a long queue to buy kerosene oil for kerosene cookers amid a shortage of domestic gas due to country's economic crisis, at a fuel station in Colombo, Sri Lanka March 21, 2022. REUTERS/Dinuka Liyanawatte

March 22, 2022

By Uditha Jayasinghe

COLOMBO (Reuters) -Sri Lanka will hire a global law firm to provide technical assistance on debt restructuring ahead of talks with the International Monetary Fund (IMF) on the country’s economic crisis, a top official said on Tuesday.

The island’s currency reserves have slumped 70% in the last two years to $2.31 billion and it has to repay about $4 billion in debt in the remainder of this year.

The drain of its dollars has left Sri Lanka struggling to pay for critical imports, including food, fuel and medicine. The government ordered the military to post soldiers at hundreds of gas stations on Tuesday to help distribute fuel.

Sri Lanka’s cabinet made the decision to appoint a technical adviser on Monday, spokesman Ramesh Pathirana told reporters.

He said the central bank governor, foreign and justice ministers would oversee the selection process.

Sri Lanka’s finance minister is due to head to Washington next month for the IMF talks.

(Reporting by Uditha JayasingheEditing by Swati Bhat and Neil Fullick)