A man rests while waiting in a line to buy diesel near a Ceylon Petroleum Corporation fuel station in Colombo, Sri Lanka, April 7, 2022. (Reuters)Sri Lanka Crisis Live News Updates: Sri Lanka’s main Opposition party SJB on Friday announced that it will move a no-confidence motion against the government of President Gotabaya Rajapaksa if it fails to take steps to address the concerns of the public facing hardships due to the worst economic crisis. Opposition leader Sajith Premadasa also called for the Executive Presidency to be abolished, saying power should be divided between the Executive, Legislature and Judiciary.
Meanwhile, Sri Lanka’s central bank doubled its key interest rates on Friday, raising each by an unprecedented 700 basis points to tame inflation that has soared due to crippling shortages of basic goods driven by a devastating economic crisis. The heavily indebted country has little money left to pay for imports, meaning fuel, power, food and, increasingly, medicine are in short supply. Street protests have been held nearly non-stop for more than a month, despite a five-day state of emergency and a two-day curfew..
Sri Lanka’s finance minister said on Friday the country had no alternative to restructuring its debt, as it faces a crippling economic crisis. “A hard default is a dangerous situation. Our trade deficit is of about $8 billion, on top of that we have to repay debt,” Ali Sabry told parliament. “We have to decide if we are going to feed our people or pay our debt. But we cannot step away from repaying debt because the consequences are terrifying. There is no alternative, we must restructure our debt.”
People leave after being informed by the manager of a Ceylon Petroleum Corporation fuel station that they are out of kerosene in Colombo. (Reuters)
The Indian Express is in Sri Lanka to document what is possibly the worst economic crisis our south-eastern neighbour has seen in decades. Shelves of supermarkets are virtually empty because of food shortage with the nation’s 21 million residents now forced to pay triple for basics like rice, sugar, lentils, and milk powder.
Sri Lanka's central bank doubled its key interest rates on Friday, raising each by an unprecedented 700 basis points to tame inflation that has soared due to crippling shortages of basic goods driven by a devastating economic crisis.
The heavily indebted country has little money left to pay for imports, meaning fuel, power, food and, increasingly, medicine are in short supply. Street protests have been held nearly non-stop for more than a month, despite a five-day state of emergency and a two-day curfew.
The Central Bank of Sri Lanka's (CBSL) monetary board raised its standing lending facility to 14.50% and its standing deposit facility to 13.50%. (Reuters)
Sri Lanka's newly-appointed Finance Minister Ali Sabry, who resigned from the post within 24 hours of his appointment, returned to the position on Friday and would head the government's negotiating team at the IMF as the island nation struggles to combat the unprecedented shortage of foreign reserves.
Former Justice Minister Sabry told Parliament on Friday that he had resigned from the post to give way for someone more suitable to accept the post. However, since no one came forward to accept the post he decided to continue as the Finance Minister.
“I will remain as the Finance Minister to do the needful to save the economy,” Sabry told Parliament. President Gotabaya Rajapaksa had appointed Sabry as the Finance Minister on April 4 after sacking his younger brother Basil Rajapaksa, who was at the centre of anger within the ruling Sri Lanka Podujana Peramuna coalition. (PTI)
Sri Lanka's main Opposition party SJB on Friday announced that it will move a no-confidence motion against the government of President Gotabaya Rajapaksa if it fails to take steps to address the concerns of the public facing hardships due to the worst economic crisis.
Opposition leader Sajith Premadasa also called for the Executive Presidency to be abolished, saying power should be divided between the Executive, Legislature and Judiciary.
“The government must pay heed to the public demand for the Rajapaksas to quit, if not we will bring a no confidence motion," the leader of the Samagi Jana Balawegaya (SJB) told Parliament. (PTI)
Sri Lankan business leaders on Friday called for an end to the country's political instability amid public demands for the president to resign over alleged economic mismanagement, warning that failure to do so would lead to economic catastrophe.
Leaders from 23 business associations representing export, import and logistics firms told reporters in the capital, Colombo, that they want lawmakers to ``act responsibly and resolutely to implement remedial solutions to halt and then reverse the rapidly deteriorating situation.'' The associations warned that their industries, which collectively earn around $16.7 billion annually through merchandise and service exports, would come to a standstill if the current situation continues.
The Indian Ocean island nation is experiencing its worst economic crisis in decades. (AP)
Sri Lanka's finance minister on Friday said that the crisis-hit country must urgently restructure its debt and seek external help, while the main opposition threatened a no-confidence motion and business leaders warned that exports could plummet.
The heavily indebted country has little money left to pay for imports, leading to crippling shortages of fuel, power, food and, increasingly, medicine. Street protests have been held nearly non-stop for more than a month, despite a five-day state of emergency and a two-day curfew.
"We cannot step away from repaying debt because the consequences are terrifying. There is no alternative, we must restructure our debt," Ali Sabry told parliament. A repayment of $1 billion is due in July. J.P. Morgan analysts estimate that Sri Lanka's gross debt servicing costs will amount to $7 billion this year in total. (Reuters)
Sri Lankan shares closed lower for a third consecutive session on Friday, hurt by losses in financials and consumer staples stocks, as investors awaited the central bank's monetary policy meeting outcome later in the day as the country grapples with the worst economic crisis in decades.
* The CSE All-Share index settled 1.39% lower at 8,135.25 points. For the week, the index fell 3.97%.
* The Central Bank of Sri Lanka is expected to raise key interest rates by as much as 400 basis points (bps) following a 100 bps rise in early March.
* The debt-laden country currently faces shortages of food, fuel and medicines and prolonged power cuts as it struggles to pay for imports of fuel and other goods due to a scarcity of foreign exchange. (Reuters)
When 16 Sri Lankan Tamils came ashore in Tamil Nadu last month, they were following a long line of predecessors who had fled war and discrimination in Sri Lanka. This time, while the reasons were more economic than political, the challenges facing the new wave of refugees from the island nation are unlikely to be different.
They are certain to join the approximately 100,000 Sri Lankans living in refugee camps across India or if they’re very lucky, the 34,000 individuals residing outside of the camps. This new wave of migration is unlikely to ease up anytime soon, explains Dr C Valatheeswaran, a Senior Fellow at the International Institute of Migration and Development (IIMD), adding that while we won’t see refugees arriving in the same numbers as before, more are sure to come.
Sri Lankan Tamils in India can widely be divided into those who reside in the camps and those who do not. The distinction, an expert notes, is contingent on their economic status at the point of arrival. The wealthy, educated refugees largely migrated to the cities and were soon indistinguishable from the local population. The poor, illiterate ones on the other hand, were forced to reside in camps, and according to Dasgupta “ segregated from the local population, barred from living or working amongst them”.
Read about the history of Sri Lankan refugees in India, the state of the refugee camps, and the politics around them in this research piece by Mira Patel.
"The government needs to address the financial crisis and work to improve governance, or we will move a no-confidence motion against the government," Sajith Premadasa, the leader of Samagi Jana Balawegaya, said in parliament.
"It is imperative that Sri Lanka must avoid a disorderly debt default. The government must work to suspend debt and appoint financial advisers to start off the process of restructuring debt," he said.
Parliament proceedings were suspended twice in the morning after parliamentarians heckled each other, with two members temporarily removed from the chamber on the orders of the speaker. (Reuters)
A member of the ruling party in Sri Lanka has said that the President is yet to accept the resignation of the Finance Minister, Reuters reported.
Ali Sabry, who earlier held the Justice Ministry, had tendered his resignation just a day after his appointment stating that "fresh, proactive, and unconventional" steps were needed to tide over the financial crisis, including a new FM. He had replaced the President's brother Basil Rajapaksa. However, in his letter of resignation, Sabry said that he had no intention of taking up a post after resigning as the Minister of Justice following protests against the country.
The head of Sri Lanka's main Opposition party said on Friday it would move a no-confidence motion in Parliament against the government if it does not take measures to address the country's financial crisis and improve governance.
Sajith Premadasa, chief of the Samagi Jana Balawegaya party, made the threat in Parliament. (Reuters)
"When India suffered during Covid-19, there were prayers from Sri Lanka, and when Sri Lanka suffered due to Covid, India helped them with medicines and other essentials. We have been in close contact and discussions with the government of Sri Lanka for post-covid economic recovery," Gopal Baglay, India's High Commissioner to Sri Lanka said.
"In view of these discussions, the focus has been on support for currency to currency swap, extending credit for fuel and food, energy security, and encouraging Indian investment in Sri Lanka," Baglay was quoted as saying by ANI.
He added that as the closest maritime neighbour, India's ties with Sri Lanka are a "confluence of thee factors: Vasudev Kutumbkam, Doctor of Sagar and Neighbourhood First."
Sri Lanka may run out of diesel by the end of this month amid the worsening crisis and shortages, as the $500 million line of credit extended by India for fuel purchase is exhausting fast, PTI has reported.
Meanwhile, tea, garment and other industry leaders quoted by Reuters have expressed fears that the country’s goods and services exports could plunge 20 to 30 per cent this year due to high freight charges and power cuts, potentially worsening an economic crisis.
A family of four, including two children, fleeing Sri Lanka amid the economic crisis followed by unrest landed at Dhanushkodi in Rameswaram on Friday morning, the police said. According to the cops, fishermen in the area alerted them after they spotted the family and their boat near the shore.
“They are being shifted to the Mandapam camp. Further steps will be decided after the state intelligence and central agencies complete their procedures,” an officer said. The family sailed to the shore in Tamil Nadu on a fibre boat. They had told the local officials that they had started sailing from the Jaffna coast in the north of Sri Lanka. Read more
Blaming China for the economic crisis in his country, a Sri Lankan refugee at the Mandapam Camp in Tamil Nadu told news agency ANI, "This situation could've been avoided if Sri Lanka had a good relationship with India. The main reason for this situation is China. Sri Lanka got trapped in the debt trap of China. We are definitely worried about our people living there."
Another refugee at the camp said, "Very concerned about our relatives. They're living without food and other essentials. There's no electricity to charge mobiles. We are unable to talk to them."
President Office on Thursday announced Nandalal Weerasinghe was appointed as the Governor of the Central Bank of Sri Lanka, replacing Ajith Nivard Cabraal, who resigned earlier this week just seven months after taking charge in September 2021.
K M M Siriwardena was appointed as the Secretary to the Treasury, replacing S R Attygalle.
Meanwhile, the hunt is on for a new Finance Minsiter, after Ali Sabry, who had replaced the President's brother Basil Rajapaksa, resigned just a day after his appointment.
Demonstrations continued across the crisis-hit nation on Thursday, with protesters gathering outside Prime Minister Mahinda Rajapaksa’s official residence, 'Temple Trees' in Colombo, accusing the government of mismanagement.
The Central Bank is expected to hold a monetary policy meeting Friday, under its new chief P Nandalal Weerasinghe, who took charge on Thursday.
Speaking to news agency Reuters, analyst Lakshini Fernando of Asia Securities said the Bank was expected to hike key interest rates by 300-400 basis points - following a 100 bps increase in early March - to tame inflation that hit 18.7% in March.
"We also expect the newly appointed governor to outline potential measures to be included in the IMF reform plan, views on potential debt restructuring, and currency management," Fernando said.
The Colombo Chief Magistrate court has barred Ajith Nivard Cabraal, former Central Bank of Sri Lanka Governor, who resigned earlier this week, from travelling out of the country.
The order came in a case filed by an anti-corruption activist, Keerthi Tennakoon, over Cabraal’s alleged “misdeeds” when he was the Central Bank governor in his first tenure between 2006 and 2015. Cabraal must appear before the magistrate on April 18, according to the order, PTI reported.
External Affairs Ministry Spokesperson Arindam Bagchi Thursday said India has been keenly following the evolving economic situation and other developments in Sri Lanka.
"Since mid-March, over 270,000 metric tonnes of diesel and petrol have been delivered to Sri Lanka. In addition, around 40,000 tonnes of rice have been supplied under the recently extended USD 1 billion credit facility," Bagchi said at a media briefing.
"We have already conveyed to them on various occasions our readiness to extend whatever support we can and as has been demonstrated by our actions till now," he said.