Getting out of a debt hole: Some advice for Sri Lanka’s establishment – by Aravinda Korala 4 th February 2022 As I write this article in January 2022, Sri Lanka has its back to the wall. There is a raging foreign exchange (forex) crisis with low levels of forex reserves held by the central bank, a significant monthly trade deficit with the external world, large foreign debt repayments due to be paid this year and for years to come, and no obvious way out of this crisis. The public debate hovers around whether the country should go to the IMF and restructure the debt, or perhaps borrow more from China and other Asian countries, or even default on the debt. None of these is attractive, but more importantly, none of these options will by themselves fix the long-term problem that Sri Lanka has. Any kind of new debt, or ...