Sri Lanka Economic Crisis: The economic crisis in Sri Lanka is deepening day by day, with the country running out of essentials including food, medicines and fuel, and millions of people suffering due to it. Sri Lankans are facing the worst economic crisis it has seen in decades, with inflation being at an all-time high. Violence is still prevailing, with the government resigning days back and the country being ruled by president Gotabaya Rajapaksa. Sri Lanka steeply devalued its currency last month ahead of talks with the International Monetary Fund (IMF) for a loan programme, following which the crisis spiralled like no other.
In a recent development, Sri Lanka‘s securities commission has directed the Colombo Stock Exchange to pause operations for a week from April 18, to help investors digest the economic shock. Here are the latest developments on Sri Lanka economic crisis:
1. Stock Exchange to be Closed: The Colombo Stock Exchange will halt its operations from Monday after a direction from the Securities and Exchange Commission of Sri Lanka. The SEC said in a statement on Friday that the board of directors of the stock exchange, and other stakeholders had asked for a temporary halt of market proceedings. “The SEC has carefully considered the grounds that have been adduced by them and has evaluated the impact the present situation in the country could have on the stock market, in particular the ability to conduct an orderly and fair market for trading in securities,” it said.
2. Scheduled Power Cuts to Resume: Sri Lanka’s will be again imposed with scheduled power cuts from Saturday, April 16, after a temporary suspension due to the April New Year festival in the country. According to a report by DNA, Sri Lanka authorities will disrupt power services across the country in two-hour slots between 9am to 6pm. There will be no power cuts during the nights.
3. Cooking Gas Crisis: Sri Lanka has started a process to import cooking gas through a credit line arrangement with India, the chair of the country’s state-run gas company Litro Gas said on Friday as he resigned from his post alleging that a gas mafia was engaged in corruption amidst the country’s worst economic crisis. Theshara Jayasinghe, the Chairman and CEO of Litro Gas, the country’s largest importer and supplier of cooking gas, said in his resignation letter to President Gotabaya Rajapaksa: “I had initiated a process through the Indian High Commission to obtain an Indian credit line to import gas. This could be easily implemented”.
4. External Debt Payment Suspended: Sri Lanka’s central bank said on Tuesday it had become “challenging and impossible” to repay external debt, as it tries to use its dwindling foreign exchange reserves to import essentials like fuel. The country has unilaterally suspended payment of external debts amid the crisis. “We need to focus on essential imports and not have to worry about servicing external debt,” Central Bank of Sri Lanka’s governor, P. Nandalal Weerasinghe, told reporters. Weerasinghe said the suspension of payment would be until the country came to an agreement with creditors and with the support of a loan programme with the International Monetary Fund (IMF). Sri Lanka starts formal talks with the global lender on Monday for emergency loans.
5. Fuel Rationing Imposed: Sri Lanka has imposed fuel rationing from Friday, with state-run Ceylon Petroleum Corporation (CPC), which accounts for two-thirds of the retail fuel market, saying it would limit the quantities drivers can buy, and banned pumping into cans altogether to prevent motorists stocking up on petrol or diesel in fear of further rationing.
(With agency inputs)
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