Political crisis, tumbling rupee add to Sri Lanka’s economic woes

China and India are both keeping a close eye on the political situation in Sri Lanka. The island nation plunged into a constitutional crisis with two men claiming to be the lawful prime minister.

Sri Lanka owes more than $50bn to foreign lenders, which is 77 percent of its gross domestic product (GDP). Next year, it has to pay back more than $4bn of its foreign loans, which just got harder as the political crisis has sent the rupee to its lowest ever level against the US dollar.

China sees Sri Lanka as crucial in its plans to expand trade routes, while India is nervous about growing Chinese influence in its neighbourhood.

Al Jazeera’s Bernard Smith reports from Colombo.