Sri Lanka’s foreign reserves have stagnated at just over $6 billion, leaving the government scrambling to find nearly $1 billion more before year’s end, as critics warn that the country’s debt restructuring plan with international creditors could trigger a deeper economic crisis.
Sri Lanka’s foreign reserves remain under severe pressure, with the government facing a daunting task of boosting them by nearly $1 billion before December. Duminda Nagamuwa, National Executive Member of the People’s Struggle Alliance, raised alarm at a press conference, accusing the government of misleading the public about the true state of the economy.
Nagamuwa said that while the government boasts of stability, the numbers tell a different story. At the end of 2024, the country’s foreign exchange reserves stood at $6,091 million. By July 2025, reserves had increased by only $53 million, reaching $6,144 million. According to the economic plan, reserves must grow to $7,174 million by the end of this year, meaning Sri Lanka still needs an additional $950 million within the next few months.
“The government must come forward and reveal how it plans to secure nearly $1 billion in reserves before the year ends,” Nagamuwa declared.
He criticized the administration for entering into what he described as “unfavorable debt restructuring agreements” with international sovereign bondholders and financial groups without considering the will of the people. Under these agreements, Sri Lanka is currently paying only interest on its debt, with repayments scheduled to resume in 2028. By then, foreign reserves are expected to reach $15 billion.
Nagamuwa warned that the target is highly unrealistic. “Today, reserves stand at just $6 billion. That means we will have to find an additional $9 billion in the next three years. This is a very serious situation,” he said.
He argued that the People’s Struggle Alliance had long warned against adopting the debt restructuring plan pushed by former President Ranil Wickremesinghe in collaboration with the International Monetary Fund. By ignoring those warnings, Nagamuwa claimed, the government has placed the economy on a dangerous trajectory.
“This unfavorable debt agreement will leave the country vulnerable to a serious economic shock in the years ahead,” he cautioned, calling for urgent transparency and accountability in how the government plans to manage the looming foreign reserve shortfall.
