Sri Lanka owes US$751mn to oil suppliers: Minister

Sri Lanka owes 751 million US dollars in arrears to foreign oil suppliers for purchases already made, Power and Energy Minister Kanchana Wijesekera said as the country struggles with the worst currency crisis in the history of the island’s central bank.

Sri Lanka’s state-run Ceylon Petroleum Corporation has a habit of getting oil on credit and paying later, especially when money printing to keep rates down triggers forex shortages.

Forex shortages and currency crises are a problem linked to pegged central banks with an active policy rate which are absent in hard pegs (interest rate floats) or clean floating exchange rate regimes.

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