Lack of foreign currency in the country and the rise of inflation coupled with the steep increase of fuel prices led the common men in Sri Lanka to resort to protests in streets and even tried to storm the presidential palace on Tuesday asking the president’s resignation.
Long queues in the petrol stations and black out across Sri Lanka is a norm now. Prices for medicine, food, fuel, cooking gas, milk, rice, and all gone up drastically. Fuel prices alone rose to 40% and the shortage led to transportation a standstill. The average citizen’s ability to make ends meet is becoming increasingly difficult. While power cuts have been the latest hardship to hit the Sri Lankans. the Ceylon Electricity Board said it will continue with the 7.5 hour power cuts, despite assurances from the country’s leadership that power outages would come to an end from March 5. With shortages of LP Gas, the power cuts have exacerbated the injuries caused to small business owners.
President Gotabaya Rajapaksa held and emergency meeting with visiting IMF officials and the Finance Minister Basil Rajapaksa rushed to Delhi to met with Prime Minister Modi for an emergency aid of 100 million USD where in India already lend Sri Lanka with140 million USD. There are unconfirmed reports that Reserve Bank Governor Ajith Cabraal has been asked to resign from the post by the country’s President.
Why the Economic Crisis in Sri Lanka?
Sri Lanka depends on imports, due to covid the main industry, tourism suffered a huge setback and caused a foreign currency deficit to pay for imports. The country has de-valuated Sri Lankan currency to 15% in a desperate attempt to get foreign loans and that led to inflation.
