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 Economic Crisis News: 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 reported.
Tea, garment and other industry leaders quoted by Reuters have also 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.
Meanwhile, the Central Bank is expected to hold a monetary policy meeting Friday, under its new chief P Nandalal Weerasinghe. Former Central Bank Governor Ajith Nivard Cabraal was barred by a Colombo court from travelling out of the country, in connection with a case of alleged “misdeeds” during his tenure. Cabraal must appear before the magistrate on April 18, according to the order, PTI reported.
Demonstrations continued across the crisis-hit nation on Thursday, with protesters gathering outside Prime Minister Mahinda Rajapaksa’s residence, accusing the government of mismanagement. The Sri Lanka Medical Association has sent a letter to President Gotabaya Rajapaksa saying that hospitals have already decided to curtail services. Unless supplies are urgently replenished, “within a matter of weeks, if not days, emergency treatment will also not be possible. This will result in a catastrophic number of deaths,” the letter said.
People leave after being informed by the manager of a Ceylon Petroleum Corporation fuel station that they are out of kerosene in Colombo. (Reuters)
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.
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Several people, including medical professionals, have been protesting across our island neighbour, as it reels under its worst economic crisis. Earlier this week, the Sri Lankan government had asserted that the President will not resign, despite public anger. It has also formed an advisory panel to assist the government in talks with the IMF, for a possible financial bailout.
Stay tuned as we bring you the latest updates!