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Sri Lankan central bank governor resigns amid a worsening economic crisis

Angry protests have swept the island nation as the country finds itself embroiled in a dire economic crisis, reflected in the shortages of food, fuel, power, gas and soaring inflation.

The governor of Sri Lanka’s central bank, Ajith Nivard Cabraal, on Monday submitted his resignation to President Gotabaya Rajapaksa as the country faces its worst economic crisis in decades.

Cabraal’s resignation came seven months after he presided over the role to steer the country’s central bank and manage the economy pummelled by the ravages of the coronavirus-induced downturn and soaring debt crisis. On Monday, Cabraal took to Twitter to announce that he has stepping down from the post.

“In the context of all Cabinet Ministers resigning, I have today submitted my resignation as Governor, Central Bank, Sri Lanka to President Gotabaya Rajapaksa,” tweeted Cabraal today.

Earlier, the 26-member Sri Lankan cabinet submitted letters of resignation, except for Prime Minister Mahinda Rajapaksa even as public fury against the government over the economic crisis continues to rise. Cabraal, a veteran policymaker anointed to the position in September last year, favoured reducing reliance on foreign debt, especially from the Washington-based International Monetary Fund.

However, the crisis continued to deepen over the months as the economy remained in a free fall since the COVID-19 pandemic crushed the country’s tourism sector.

Angry protests have swept the island nation as the country finds itself embroiled in a dire economic crisis, reflected in the shortages of food, fuel, power and gas. Besides shortages and soaring inflation, the country devalued its currency last month ahead of talks with the International Monetary Fund (IMF) for a bailout.

The dire economic crisis that is engulfing Sri Lanka

Sri Lanka is faced with the worst economic crisis in its history, with inflation reaching a record high of 17.5% in February 2022. The residents of the island nation are struggling with an acute shortage of food, and cooking gas. Power cuts are frequent and people are seen standing in long queues in the National Capital for buying diesel fuel.

The government, headed by President Gotabaya Rajapaksa, has been seeking credit lines from countries such as India, China and even Bangladesh for purchasing milk powder and diesel. The situation is so grim that the central bank is forced to buy oil from Iran by bartering tea leaves.

Schools in the western province of Sri Lanka were forced to postpone the exams of their students because the country had run out of printing paper. Due to a shortage of US dollars, it had become impossible to finance the imports. Electricity power cuts have stretched up to 14-16 hours a day, making it impossible for factories to churn out products and remain profitable.

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OpIndia Staff
OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

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