World Bank approves $700 million for crisis-hit Sri Lanka

Tags: International News

The World Bank has approved a substantial funding package of 700 million dollars for Sri Lanka, providing a significant boost to the country's financial situation.

An overview of the news

• Out of the approved funds, approximately 500 million dollars will be allocated for budgetary support, aimed at stabilizing the country's economy.

• The remaining 200 million dollars will be dedicated to welfare support, with the objective of assisting those most affected by the ongoing crisis.

Sri Lanka's financial crisis 

• Sri Lanka has been facing its most severe financial crisis since gaining independence from Britain in 1948.

• The country experienced record lows in Foreign Exchange reserves last year, prompting India to provide humanitarian assistance totaling approximately 4 billion dollars through grants and lines of credit.

• The World Bank's assistance represents the largest amount of financial support received by the crisis-stricken nation since the approval of the International Monetary Fund (IMF) agreement in March.

• The IMF agreement provided Sri Lanka with an extended fund facility of close to 3 billion dollars, which will be available over a 48-month period.

About the World Bank

• It was established in 1944 and is headquartered in Washington, DC.

• Its primary goal is to reduce poverty in developing countries by providing financial assistance, technical expertise, and other resources to support development projects.

• The World Bank operates through two main institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

• The IBRD provides loans to middle-income and creditworthy low-income countries, while the IDA provides grants and loans to the poorest countries.

• The World Bank also works closely with other international organisations such as the United Nations, the International Monetary Fund, and regional development banks to coordinate development efforts and promote economic growth.

• Founders -John Maynard Keynes, Harry Dexter White

• President - Ajay Banga