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August 13
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Sri Lanka is "bankrupt," said Prime Minister Ranil Wickremesinghe, CNN reports.

Wickremesinghe told lawmakers that talks with the International Monetary Fund (IMF) to revive the country's collapsed economy are difficult because the South Asian nation of 22 million entered the talks as a bankrupt country rather than a developing one.

"We are now participating in the negotiations as a bankrupt country. Therefore, we have to face a more difficult and complicated situation than previous negotiations," Wickremesinghe said in parliament.

"Due to the state of bankruptcy our country is in, we have to submit a plan on our debt sustainability to (the IMF) separately," he added. "Only when they are satisfied with that plan can we reach an agreement at the staff level. This is not a straightforward process."

Sri Lanka is facing its worst financial crisis in 70 years after its foreign exchange reserves fell to a record low.

Schools were closed and fuel was limited to essential services. In several major cities, including Colombo, hundreds of people continue to queue for hours for fuel, sometimes clashing with police and the military. On Sunday, Sri Lankan energy minister Kanchana Wijesekera said there was less than a day's worth of fuel left in the country.

The Prime Minister expressed hope that the report on debt restructuring and sustainability will be submitted to the IMF by August. Once an agreement is reached, a comprehensive four-year loan assistance program will be prepared, Wickremesinghe said.

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