Sri Lanka economy will collapse beyond
redemption” unless a new government is appointed within two days to restore
political stability, the central bank chief said Wednesday.
He said the latest wave of mob violence derailed the bank’s recovery plans,
and the resignation of the prime minister on Monday and the lack of a
replacement was complicating matters.
Sri Lanka economy will collapse if no new govt in 2 days: the central bank
He said political stability was vital to implementing economic reforms aimed
at addressing the country’s debt crisis and the acute shortage of foreign
exchange to import essentials.
“If there is no government in the next two days, the economy will completely
collapse and no one will be able to save it,” central-bank of Sri Lanka
Governor Nandalal Weerasinghe said.
“The country was fast going down a slope when I took over just over a month
ago. I thought we were able to apply the brakes, but with events of Monday
the brakes no longer work.
“Within a week or two the economy will completely collapse. No one will be
able to save Sri Lanka at that stage. My being here as governor will not
help,” he said.
“I will resign if there is no immediate action to form a government.”
Shortly after taking over last month as the bank’s chief, Weerasinghe
announced defaulting on Sri Lanka’s $51 billion external debt saying the
country had no money to pay its creditors.
He almost doubled interest rates and allowed the rupee to depreciate rapidly
to ensure better foreign exchange liquidity in the commercial banks.
Sri Lanka is facing its worst economic crisis since independence from Britain
in 1948 after it ran out of dollars to import even the most essentials.
There had been long queues for fuel and food causing severe hardships for the
nation’s 22 million people, prompting them to protest against the government.
“If we don’t have political stability, very soon we will run out of what
little petrol and diesel left. At that point people will get on the streets
to protest peacefully or violently,” Weerasinghe added.
This week, the crisis took an ugly turn with nine people killed in violence
and more than 200 injured.
[ The central-bank of Sri Lanka (CBSL) (Sinhala: ශ්රී ලංකා මහ බැංකුව Sri Lanka Maha Bankuwa) is the monetary authority of Sri Lanka. It was established in 1950 under the Monetary Law Act No.58 of 1949 (MLA), it is a semi-autonomous body, and following the amendments to the MLA in December 2002, is governed by a five-member Monetary Board, comprising the Governor as chairman, the Secretary to the Ministry of Finance and Planning, and three members appointed by the President of Sri Lanka, on the recommendation of the Minister of Finance, with the concurrence of the Constitutional Council . ]