Business

Crisis-hit Sri Lanka halts share trading as protests spiral

Colombo to begin negotiating IMF program on Monday

Afpf April 17, 2022

Sajith Premadasa, leader of the opposition alliance, Samagi Jana Balawegaya, marches along with other opposition lawmakers towards Independence Square as they shout slogans against President Gotabaya Rajapaksa after the government imposed a curfew following a clash between police and protestors near Sri Lankan President Gotabaya Rajapaksa's residence during a protest last Thursday, amid the country's economic crisis, in Colombo, Sri Lanka April 3, 2022. PHOTO: REUTERS

COLOMBO:

Sri Lanka on Saturday announced a five-day share trading halt after the crisis-hit country hiked interest rates and declared a default on its external debt during the traditional New Year holiday, as trade unions and top cricket stars joined protests demanding the president’s resignation.

The move came ahead of Colombo’s planned talks with the International Monetary Fund in Washington on Monday to negotiate a bailout as the country has run out of foreign exchange to finance even the most essential imports.

The island nation is grappling with its worst economic downturn since independence in 1948, with regular blackouts and acute shortages of food and fuel in addition to record inflation.

The crisis has caused widespread misery for Sri Lanka’s 22 million people and led to weeks of anti-government protests.

Several trade unions joined demonstrators laying siege to President Gotabaya Rajapaksa’s seafront office for an eighth straight day Saturday demanding that he and his government quit, with thousands of health sector trade workers marching to the Galle Face promenade to join the protest.

Colombo Stock Exchange officials said they were under pressure from brokers and investors not to reopen on Monday to prevent an anticipated collapse of the market.

The CSE said regulators had expressed concern over the “ability to conduct an orderly and fair market” and it would remain closed until Friday due to the “present situation in the country”.

The central bank almost doubled its benchmark interest rate to 14.5% following the close on April 8, the last trading day before the holiday.

And in the face of an unprecedented foreign exchange crisis, the government on Tuesday declared it was suspending interest and capital payments on its huge foreign debt.

The CSE’s All Share Index has shed over 38% in the past three months, while the Sri Lankan rupee has fallen by more than 35% against the US dollar in the past month.

Sri Lanka’s World Cup-winning cricket captain Arjuna Ranatunga and fellow ex-skipper Sanath Jayasuriya became the first high profile sports stars to join the demonstrators outside Rajapaksa’s office.

Cricket is avidly followed in the Indian Ocean island nation and the pair called on other former players to support peaceful protests.

“Cricket is driven by spectators,” Ranatunga said outside the colonial-era building in Colombo on Friday, surrounded by demonstrators, some of whom have been camping overnight since last week.

“Our fans are on the streets today because they no longer can bear the hardships. We must be with our fans when they need us most. Sports stars must physically join the protests.”

Published in The Express Tribune, April 17^th, 2022.

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