Context
Refugees arriving in Tamil Nadu from Sri Lanka due to economic crises developing in the island country.
About
What type of economic crises is Sri Lankan facing?
What does Balance of Payment crises mean?
What are the reasons for Balance of Payments crises surfacing in Sri Lanka?
Remittance: It is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland. Remittances are transferred to the recipient country in the form of foreign currency and are then converted into local currency before reaching the intended beneficiaries. |
They therefore become the source of foreign currency reserve for the recipient country.
For the purpose of making indigenous currency stronger, countries sell their foreign currency. In the world market, goods from one country must compete with those from all other countries. Car makers in America must compete with car makers in Europe and Japan. If the value of the euro decreases against the dollar, the price of the cars sold by European manufacturers in America, in dollars, will be effectively less expensive than they were before. On the other hand, a more valuable currency make exports relatively more expensive for purchase in foreign markets. |
How grave is the situation in Sri Lanka?
What has the Government of Sri Lanka done to overcome the crises?
Line of Credit: It is a credit facility extended by a bank or other financial institution or a government to another government, business or individual that enables the it to draw on the facility and use the funds when needed.
What is the way forward?
Verifying, please be patient.