SL President asks Putin to help buy fuel

Sri Lankan President Gotabaya Rajapaksa has asked his Russian counterpart Vladimir Putin to help the cash-strapped island nation buy fuel as the country is undergoing its worst-ever economic crisis since gaining independence in 1948.

Taking to Twitter on Wednesday, Rajapaksa said: "Had a very productive telecon with the Russia President, Vladimir Putin. While thanking him for all the support extended by his government to overcome the challenges of the past, I requested an offer of credit support to import fuel to (Sri Lanka) in defeating the current economic challenges."

In his tweet, the President said that he also requested Russian flag carrier Aeroflot to restart operations in Sri Lanka after the airline suspended services to the island nation last month.

"We unanimously agreed that strengthening bilateral relations in sectors such as tourism, trade and culture was paramount in reinforcing the friendship our two nations share," he added.

Rajapaksa's appeal for help comes after Energy Minister Kanchana Wijesekera issued a stark warning on Sunday saying that the country only had enough petrol left for less than a day under regular demand.

Last week, authorities had suspended sales of petrol and diesel for non-essential vehicles in an attempt to preserve its dwindling fuel stocks, reports the BBC.

In an effort to tackle the soaring cost of living in the country, the Central Bank of Sri Lanka on Thursday raised its key interest rates by one percentage point.

The lending rate was raised to 15.5 per cent, while the deposit rate was increased to 14.5 per cent, the highest in 21 years.

It comes as annual inflation hit a record high of 54.6 per cent June as the cost of food rose by more than 80 per cent amid the crisis.

On Wednesday, hundreds of protesters gathered near Parliament building in Colombo as they launched their "final push" to remove Rajapaksa-led government.

The island nation of 22 million people has witnessed its foreign exchange reserves shrink due to economic mismanagement and the impact of the Covid-19 pandemic.

As a result it has struggled to pay for imports of essential goods, including fuel, food and medicine.

In May, it defaulted on its debts for the first time in its history after a 30-day grace period to come up with $78 million of unpaid debt interest payments expired.

The country is currently in negotiations with the International Monetary Fund (IMF) over a bailout.

Sri Lanka's government has said it needs $5 billion this year in support from the international community, including the IMF.