Friday, July 1, 2022

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Sri Lanka awaits a new Finance Minister 

Authorities in Sri Lanka this week are expected to name a new finance minister and raise interest rates as they struggle to stabilize an economy spiraling into chaos by a lack of dollars and surging inflation.

Prime Minister Ranil Wickremesinghe, appointed last week, is expected to soon choose a finance ministeror take up the portfolio by himdelf  help lead talks with the International Monetary Fund over badly needed aid.

Meanwhile, the Central Bank of Sri Lanka is expected to raise its benchmark standing lending rate by 75 basis points on Thursday from 14.5%,  as it tries to battle Asia’s fastest inflation.

The decisions come as the South Asian country barrels toward its first official default, with the 30-day grace period for missed interest payments on dollar bonds ending Wednesday.

The prime minister on Monday warned that the country was down to its last day of gasoline supplies, as it doesn’t have the dollars to pay for shipments aboard tankers anchored just offshore.

 He also said it would need to print money to pay government salaries, a move that will certainly worsen inflation already running near 30%.

Sri Lanka ‘ present administration headed by newly appointed Prime Minister Ranil Wickremasighe will unveil economic recovery plan or Way forward fiscal plan next week .

The Finance ministry  has allready devised this  fiscal plan  for economic recovery to operationalise necessary measures to build the credibility of the economy on a sustained basis.

It has suggested a holistic national effort, with the participation and ownership of all stakeholders including citizens, political entities, the civil service, and private sector, among others. 

Prime Minister Ranil Wickremesinghe told parliament on Wednesady18 that he will submit this economic recovery plan next week although there was some  some disparity in the Government data.

He also promised to arrange a meeting between the main opposition Samagi Jana Balawegaya (SJB) and Treasury to discuss matters related to the economy.

The offer was made by the Prime Minister while responding to a question raised by SJB MP Dr. Harsha de Silva in Parliament yesterday.

Dr. Harsha de Silva questioned reports that Sri Lanka was going into a hard default of its repayments.


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