Sri Lanka’s central bank on Sunday tightened controls on foreign currency outflows to tackle the growing cash shortage triggered by the coronavirus pandemic.

Foreign exchange reserves have almost halved since late 2019 to $ 4 billion after the rupee hit a record high last year.

The economy has been hit hard by the spread of the virus and lockdowns in its worst downturn since independence from Britain in 1948.

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The Central Bank of Sri Lanka said overseas investments by local businesses would be suspended for six months.

The amount of capital that businesses and citizens can withdraw from the island nation would also be limited, he added.

Sri Lanka has already banned imports of luxury goods and cars since last year to combat foreign currency outflows.

The government is considering extending the import ban to include cellphones, computers and electronic consumer goods, local media reported recently.

The central bank said in a statement that the restrictions were aimed at “helping and maintaining the stability of the financial system.”

International rating agencies have expressed concern over Sri Lanka’s ability to service its huge external debt.

But central bank governor WD Lakshman said the country would honor its debts, which stand at $ 3.6 billion over the next six months.

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Colombo has also borrowed from several Asian countries, including Bangladesh, China and South Korea, and expects to receive $ 800 million from the International Monetary Fund in August.

The country’s debt has swelled over the past two decades after funding several infrastructure projects that critics say have become white elephants.