UN human rights experts have urged the Sri Lankan Government to guarantee the fundamental rights of peaceful assembly and of expression during peaceful protests, amid the country’s severe economic crisis.

“We are gravely concerned by the recent proclamation of a state of emergency as well as the order that blocked access to social media platforms,” the experts said.

“These measures seem aimed at discouraging or preventing peaceful protests in the wake of the worsening economic crisis and the lack of access to fuel, electricity, medicines and essential food items.

“We condemn the excessive use of teargas and water cannon to disperse protesters, as well as the recent block of social media platforms. 

We urge the Sri Lankan Government to allow students, human rights defenders and others to protest in a peaceful manner, and to freely share their political views and express their discontent, both online and offline.” 

Sri Lanka’s population has been hit by rising inflation, shortages of fuel and essential goods and prolonged power cuts as a result of a scarcity of foreign exchange. The economic crisis has aggravated an already dire situation on access to food and health, causing difficulties for millions of persons living in poverty and for persons with serious medical conditions to access medicines or hospitals.

On 31 March 2022, hundreds of people gathered in front of the president’s residence, demanding his resignation over his handling of the crisis, in an initially spontaneous and peaceful demonstration. Security forces fired teargas and water cannon to disperse the crowd, prompting clashes. Nearly 50 people were injured, including several journalists, and there were more than 50 arrests.

The compounded impact of foreign debt, corruption and the COVID-19 crisis, has affected the country’s economy. Experts called on the government to ensure that all human rights be respected and protected.

Thousands of people have since joined the daily protests, calling for political and economic reforms. The government imposed nationwide curfews from 2 to 4 April, arresting over 600 people found in violation of the curfew. 

On 2 April 2022, the president declared a nationwide public state of emergency, that has since been revoked, empowering him to override most laws with the exception of the constitution, while the government blocked access to several social media platforms. Access to these platforms was later restored.

The experts called on the authorities to engage in constructive and open dialogue with the Sri Lankan people.

“Peaceful protests and voices of legitimate dissent should not be met with unnecessary and excessive use of force by authorities,” the experts said. “Resorting to use of force against protesters will only jeopardize avenues to express discontent peacefully, risking instead an escalation of tensions.

“We urge the Sri Lankan Government to seek an open and genuine dialogue with peaceful demonstrators on political reforms and means to lessen the impact of the economic crisis.”

The worsening economic crisis has forced the Monetary Board to effect a historic monetary tightening with the new Central Bank Governor justifying the move as critical to ensure macroeconomic stability.

The Monetary Board at its meeting under new Governor Dr. P. Nandalal Weerasinghe decided to increase the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 700 basis points to 13.50% from 6.50% and 14.50% from 7.50%, respectively with immediate effect.

“This is the highest ever policy rate hike and tightest monetary policy action in the history of the Central Bank of Sri Lanka and this critical decision was after a honest and realistic assessment by the Monetary Board,” Dr. Weerasinghe told journalists at a late evening briefing following the Monetary Board meeting.

He also described the Monetary Board move as “proactive”, implying that some of the decisions in recent times had not been so, hence the ongoing crises in the country.  

In its brief statement, the CBSL said the Monetary Board noted the inflationary pressures that could further intensify in the period ahead, driven by the build-up of aggregate demand, domestic supply disruptions, exchange rate depreciation and the elevated prices of commodities globally.

It was of the view that a substantial policy response is imperative to arrest the build-up of added demand driven inflationary pressures in the economy and pre-empt the escalation of adverse inflationary expectations, to provide the required impetus to stabilise the exchange rate and also to correct anomalies observed in the market interest rate structure.

Dr. Weerasinghe also told journalists that the decisive monetary policy action will send a strong message to markets and investors that the new leadership at CBSL is taking corrective action to ensure macroeconomic stability and confidence. “When the markets open on Monday we also expect the banking and financial community to respond positively,” he added.

He said the move will help suppress excessive demand, curb imports thereby reduce pressure on forex reserves, reign-in a higher inflation in the medium term.

 However, he cautioned that proper beneficial impact of yesterday’s decision will be felt only in three to six months and in the interim inflation is forecast to rise from current 17.5% to over 25% due to past policy slips.

“It is not an easy situation. We can’t turn around a crisis caused by two years within two days. However I am confident in Central Bank playing its part for an early turnaround,” the new Governor added. 

Dr. Weerasinghe also said that whilst tighter monetary policy and other planned measures including an IMF support program along with a foreign debt restructuring strategy and prudent fiscal policy can help towards creating a conducive environment, for greater macroeconomic stability, the ongoing political crisis and social unrest must end.

“The pace of turnaround (with new CBSL measures and IMF support) and an end to sufferings of the people depends on restoration of political stability and normalcy,” he added. 

The new Governor also promised to restore the independence and credibility of the CBSL. “An independent Central Bank is the only way to ensure prudent policies irrespective of politics. 

existing Monetary Law Act provides for such independence. I will not tolerate political interference during my tenure and I have the fullest support of the Government, the Opposition and the public,” he said.

“CBSL is accountable and responsible to the people not a political party. I have to live up to public expectations of ensuring  CBSL independence and credibility,” added Weerasinghe, who was previously a Senior Deputy Governor and took early retirement in October 2020 after he was side-lined in the early part of the Gotabaya Rajapaksa administration.