Sri Lanka debt crisis was due to the economic mismanagement. Sri Lanka's current debt to GDP had skyrocketed from 42% in 2019 to 104% in 2021.According to Bloomberg, Sri Lanka has about $8.6 billion in debt payments due this year, yet, as of March 2022, the country has only $1.94 billion in its reserves. Sri Lanka must pay $78.2 million in interest payments on April 18 2022, followed by a $1 billion payment on a bond maturing on July 25. Investors doubt Sri Lanka will be able to make the July payment, with the bond trading well below face value at $0.54 to the dollar on Thursday. The Sri Lankan government has tried to find ways to bolster its foreign reserve holdings so that it has enough money to settle its debt payments. On March 12 2022, the central bank ordered Sri Lankan exporters to convert their foreign currency into rupees within 180 days to help replenish the bank's foreign reserves. But with debt levels almost four times the country's reserves, a payments crisis is brewing. 

Question: Discuss, what are the steps should be taken by the  Sri Lanka government to their monetary and fiscal policy

Answer rating: 100% (QA)

ANSWER The Sri Lankan government faces a significant challenge in managing its debt crisis and stabilizing its economy To address the situation effectively the government should consider implementing ... View the full answer