KUALA LUMPUR, April 2 – The Sri Lanka government, which declared a state of emergency on April 1st, has announced a nationwide curfew from today 6 pm to Monday morning 6 am.
According to local media, the curfew follows protests in the past week amid the country’s worsening economic crisis, that has resulted in rationing of fuel and food supplies.
The country, which is deep in debts, has to repay debt of about US4 billion this year, including a US$1 billion international sovereign bond that matures in July 2022.
With its reserves down, the country has not been able to even import food and fuel, resulting in food and fuel rationing.
Several protests against has been carried out against the government, with protestors claiming failure by the government to reign in the worsening economic crisis.
Meanwhile during a recent press briefing, IMF Director of Communications Department, Gerry Rice said that Sri Lanka had expressed interest in IMF’s support and financial program.
He had said that IMF planned on initiating discussions with the Sri Lankan authorities on the support and financial programme, including during the Finance Minister’s visit to Washington in April.
Earlier in February, the IMF released a report on Sri Lanka’s economic outlook, saying that the COVID-19 had severely hit the economy, causing a loss of tourism receipts and necessitating several strict lockdowns.
“Pre-pandemic tax cuts and the impact of COVID-19 led to fiscal deficits larger than 10 percent of GDP in 2020 and 2021 and a rapid increase in public debt to 119 percent of GDP in 2021.
“Sri Lanka’s access to international capital markets was lost in 2020, prompting a decline of international reserves to critically low levels and large-scale direct lending to the government by the Central Bank of Sri Lanka (CBSL).
“External debt repayments and a widening current account deficit have led to foreign exchange (FX) shortages, while the official exchange rate has been de facto fixed since April 2021. Inflation is on the rise, reaching double digits in December 2021, reflecting imported inflation, supply shocks, and a pickup in domestic demand amid loose monetary policy.”
Meanwhile, India and China have already pledged emergency loans amounting to US$4.5 billion to Sri Lanka.