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Why Sri Lanka's foreign exchange reserves are being drained : The Indicator from Planet Money A series of policy missteps combined with a global pandemic is putting heavy economic pressure on Sri Lanka. Today, the events that led to surging prices, power outages and violent protests in the island nation.

The Indicator from Planet Money

Sri Lanka's foreign exchange problem

Sri Lanka's foreign exchange problem

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(Photo by Abhishek Chinnappa/Getty Images)
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Abhishek Chinnappa/Getty Images
(Photo by Abhishek Chinnappa/Getty Images)
Abhishek Chinnappa/Getty Images

Foreign exchange reserves are essential for governments that wish to take part in the global economy. Sri Lanka used to count on foreign borrowing and tourism to bring in US dollars. But in the last two years, the country has rapidly drained its reserves, leading to an economic crisis.

Today, we explore how Sri Lanka reached this point.

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