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Sri Lanka shuts three foreign missions to save forex after printing money | EconomyNext - EconomyNext

Monday December 27, 2021 7:00 pm

Monday December 27, 2021 7:00 pm

ECONOMYNEXT – Sri Lanka is closing one embassy and two consulates, to save foreign exchange, the Ministry of Foreign Affairs said as the country is facing forex shortages after an unprecedented bout of money printing.

The High Commission of Sri Lanka in Abuja/Nigeria, Consulate General of Sri Lanka in Frankfurt/Germany, Consulate General of Sri Lanka in Nicosia/Cyprus will be temporarily closed.

“The restructuring is undertaken with a view to conserving the country’s much needed foreign reserves and minimising expenditure related to maintenance of Sri Lanka’s Missions / Posts overseas, while ensuring the effective conduct of bilateral relations, in the backdrop of the grave economic challenges posed by the global pandemic,” the Foreign Ministry said.

Sri Lanka is facing severe foreign exchange shortages after printing over 1.5 trillion rupees to keep interest rates down and finance deficits by crippling bond auctions with price controls, over the past two years.

Bond auctions are now working and money is now printed to sterilize partial interventions in the forex markets to provide convertibility to a 200 to the US dollar peg on which credibility has been lost.

The functions of Sri Lanka’s Consulate General in Frankfurt, including trade, investment and tourism promotion, and consular matters of Sri Lankan nationals living and working around Frankfurt, will be handled by Sri Lanka’s Embassy in Berlin, Germany.

“The concurrent accreditation of Cyprus through the Sri Lanka Embassy in Rome, Italy will continue, with the latter handling Sri Lanka’s bilateral relations with Cyprus as per current practice,” the statement said.

“The consular functions handled by the Consulate General in Nicosia will be brought under the purview of the Sri Lanka Embassy in Rome.

A suitably qualified Honorary Consul based in Nicosia will be appointed to help 6000 odd Sri Lanka workers in Cyprus. (Colombo/Dec27/2021)