Sri Lanka is facing its worst economic crisis since gaining independence from the British in 1948 which has triggered food shortages, soaring prices and power cuts. Many say the government is to blame. and in recent days, thousands of Sri Lankans have taken to the streets to demand the resignation of President Gotabaya Rajapaksa, reports the BBC. Sri Lanka’s problems come down to the fact that its foreign currency reserves have virtually run dry. It means the island nation cannot afford to pay for imports of staple foods and fuel, leading to acute shortages and very high prices. The government blames the pandemic, which all but killed off Sri Lanka’s tourist trade, one of the island’s biggest foreign currency earners, the BBC reported. It also says tourists were frightened off by a series of deadly bomb attacks on churches during the 2019 Easter Sunday attacks. However, many experts say economic mismanagement is to blame. There are many reasons for this, but one main factor is that at the end of its 30-year civil war in 2009, Sri Lanka chose to focus more on its domestic markets instead of exporting to foreign ones. So income from exports remained low, while the bill for imports kept growing. The government also racked up huge amounts of debt to fund what critics have called unnecessary infrastructure projects. At the end of 2019, Sri Lanka had $7.6 billion in foreign currency reserves, but by March 2020 it had only $2.3 billion. When he came to power in 2019, President Rajapaksa decided to cut taxes. This meant the government had less money to buy foreign currency on the international markets to increase its reserves. When Sri Lanka’s currency shortages became a really big problem in early 2021, the government tried to stop the outflow of foreign currency by banning all imports of chemical fertiliser, telling farmers to use organic fertilisers instead. This led to widespread crop failures, said the BBC report. Sri Lanka had to supplement its food stocks from abroad, which made its foreign currency shortage even worse. The economic crisis has deepened since last year, and one of the major reasons for this downfall is organic farming. The Sri Lankan government had banned the usage of chemical fertilisers in April 2021 in order to make farming environment friendly. There were protests by farmers who asked for a hybrid policy and some transition time

Ukraine’s economic output will likely contract by a staggering 45.1% this year as Russia’s invasion has shuttered businesses, slashed exports and rendered economic activity impossible in large swaths of the country, the World Bank said on Sunday. The World Bank also forecast Russia’s 2022 GDP output to fall 11.2% due to punishing financial sanctions imposed by the United States and its Western allies on Russia’s banks, state-owned enterprises and other institutions.

The World Bank’s “War in the Region” economic update said the Eastern Europe region, comprising Ukraine, Belarus and Moldova, is forecast to show a GDP contraction of 30.7% this year, due to shocks from the war and disruption of trade. Growth in 2022 in the Central Europe region, comprising Bulgaria, Croatia, Hungary, Poland and Romania, will be cut to 3.5% from 4.7% previously due to the influx of refugees, higher commodity prices and deteriorating confidence hurting demand. For Ukraine, the World Bank report estimates that over half of the country’s businesses are closed, while others are operating at well under normal capacity. The closure of Black Sea shipping from Ukraine has cut off some 90% of the country’s grain exports and half of its total exports.

The World Bank said the war has rendered economic activity impossible in many areas, and is disrupting agricultural planting and harvest operations. Estimates of infrastructure damage exceeding $100 billion by early March – about two-thirds of Ukraine’s 2019 GDP – are well out of date “as the war has raged on and caused further damage.” The bank said the 45.1% contraction estimate excludes the impact of physical infrastructure destruction, but said this would scar future economic output, along with the outflow of Ukrainian refugees to other countries.

Equity benchmark indices opened in the green on Thursday with Sensex up by 873.74 points and Nifty up by 246.60 points.

At 9:21 am, the BSE Sensex was up by 873.74 points or 1.54 per cent at 57690.39.
The 50-scrip NSE Nifty was trading at 17221.90, at 9:21 am, up by 246.60 points or 1.45 per cent. (ANI)

Financial creditors realised 221 per cent of liquidation value and 51 per cent of admitted claims through the corporate insolvency resolution process, Union Minister of State for Finance Bhagwat Kisanrao Karad said on Tuesday.

In a written reply to a question in the Rajya Sabha, the minister noted that as per inputs received from the Ministry of Corporate Affairs (MCA), the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC), was initiated by banks in the 12 large accounts that were referred by the Reserved Bank of India.
Financial creditors had an aggregate outstanding claim of Rs 3.45 lakh crore against these corporate debtors. Out of these 12 corporate debtors, resolution plans have been approved in respect of eight corporate debtors, CIRP is ongoing in respect of two corporate debtors, and two corporate debtors are undergoing liquidation process.

With regard to resolution and settlement in these accounts, the eight corporate debtors, which were resolved through the market-driven CIRP, owed a total of Rs 2.26 lakh crore to financial creditors while their liquidation value was Rs 0.52 lakh crore, the minister said.

“Further, realisable value for financial creditors through the approved resolution plans was Rs. 1.16 lakh crore, which is 221 per cent of the liquidation value and 51 per cent of the admitted claims,” Karad added. (ANI)

The Indian rupee weakened by 22 paise to 76.16 against the US dollar on Friday as a sharp rise in crude oil prices amid the ongoing Russia-Ukraine conflict dampened investors’ sentiments.

At the interbank foreign currency market, the rupee opened the trade weak at 76.06 against the US dollar. It slipped to a low of 76.22 against the US dollar in the intra-day.
The rupee also touched a high of 75.99 against the US dollar in the intra-day.

The rupee ended the day at 76.16 against the US dollar, which is 22 paise down from its previous day’s close. (ANI)

Equity indices opened in red on Friday with Sensex down by 698.60 points and Nifty down by 207 points.
The 30-scrip BSE Sensex was down by 698.60 points or trading at 54404.08 and down by 1.27 per cent at 9.40 am. Similarly, 50-scrip NSE Nifty was trading at 16291 at 9:40 am, down by 207 points or 1.25 per cent.
On the Sensex, all sectors other than the metal sector are trading with negative bias. (ANI)