COLOMBO: Sri Lanka’s 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 were complicating matters.
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.
Sri Lanka economy will ‘collapse’ if no new govt in 2 days: central bank
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Sri Lanka economy will ‘collapse’ if no new govt in 2 days: central bank
- “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 said
- 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
Russia expels German diplomat in tit-for-tat move
- Moscow also rejected Germany’s accusations of espionage as “baseless” and accused Berlin of whipping up “a spirit of spy mania“
- Germany in January summoned Russia’s ambassador and ordered the expulsion of a diplomat
MOSCOW: Russia said Thursday it was expelling a German diplomat after Berlin last month threw out a Russian official it accused of being a spy handler.
The foreign ministry said it had issued a “note declaring a diplomatic employee of the German Embassy in Moscow persona non grata” in what was a “symmetrical response.”
Moscow also rejected Germany’s accusations of espionage as “baseless” and accused Berlin of whipping up “a spirit of spy mania.”
Germany in January summoned Russia’s ambassador and ordered the expulsion of a diplomat suspected of being the handler of a woman arrested on espionage charges.
Russia at the time dismissed the allegations as baseless and vowed a response.
German Foreign Minister Johann Wadephul on Thursday called the expulsion “completely unacceptable.”
“While our diplomats abide by the law, Russia relies on escalation and espionage under the guise of diplomacy,” Wadephul said during a visit to Brunei.
Wadephul said that “Russia’s latest unfriendly act... merely demonstrates once again that Russia prioritizes unjustified retaliation over diplomacy,” and added that “we reserve the right to take further action.”
The expelled German diplomat is part of the military attaché staff of the German Embassy in Moscow, Wadephul said.
Western states have ejected dozens of alleged Russian spies over the last decade as relations soured even before the war in Ukraine.
The expulsions have typically triggered a tit-for-tat response from Moscow.
