Sri Lankan economic crisis

Sri Lanka is considering the possibility of allowing the use of the Indian rupee for local transactions, as the island nation struggles to build its depleted foreign reserves and to emerge from last year's unprecedented economic crisis.

Sri Lanka's inflation eased to 12 percent in June, official data showed on July 1, the lowest figures since the island nation careened into an unprecedented economic crisis last year.

Sri Lanka defaulted on its $46 billion foreign debt in April 2022 and the public endured months of food, fuel and medicine shortages.

Sri Lankan authorities have declared a five-day closure of financial markets from June 29 ahead of a controversial move to restructure the government's domestic debt amounting to more than $51 billion.

The restructuring affects government bonds in line with an IMF bailout agreed in March, after Sri Lanka defaulted on its foreign debt in April last year and declared bankruptcy.