Sri Lanka Central Bank Chief Says Economy Will Collapse If No New Govt in 2 Days

He warned that the economy will "collapse beyond redemption".

Nandalal Weerasinghe. 

(Photo: Twitter/@CBSL)

The Central Bank of Sri Lanka warned on Wednesday, 11 May, that the economy will 'collapse' if no new government was formed in 2 days.

Nandalal Weerasinghe, governor of the Sri Lankan Central Bank, said to reporters that the economy will "collapse beyond redemption", as reported by AFP.

"If there is no government in the next two days, the economy will completely collapse and no one will be able to save it."

He also threatened to resign if the country did not see political stability soon.

"I took on this responsibility with expectations that political stability will be established. It’s been more than a month with no progress. I do not wish to continue in this post if political stability is not achieved,” he was quoted as saying by Bloomberg.

The country has been engulfed in violence after supporters of former PM Rajapaksa, earlier this week, attacked peaceful anti-government protesters who were demanding his ouster over the country’s crushed economy which has led to shortages of essentials like food, fuel, and power.

Sri Lanka is going through an economic meltdown of a scale unseen since the country's financial crisis of 1948. Prices of essential commodities like rice, milk, and oil have skyrocketed.

The main cause is the shortage of foreign currency, which has led to a huge reduction in imports of essential items like petroleum, food, paper, sugar, lentils, medicines, and transportation equipment.

The roots of the shortage lie in the recent failure of the tourism industry, the failure to procure enough FDI, and the government’s refusal to take a loan from the International Monetary Fund (IMF).

(With inputs from AFP and Bloomberg)