Central Bank of Sri Lanka’s governor Nandalal Weerasinghe warned on Wednesday that the country’s economy will “completely collapse” if a new government is not appointed within two days.
“If there is no government in the next two days, the economy will completely collapse and no one will be able to save it,” news agency AFP quoted Weerasinghe as saying.
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As the country witnessed the latest wave of deadly protests, fuelled by an unprecedented economic and energy crisis, Weerasinghe said the mob violence derailed the central bank’s recovery plans, adding the resignation of Prime Minister Mahinda Rajapaksa and the lack of replacement were “complicating matters.”
“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,” Weerasinghe added
Weerasinghe, who took over as the bank’s governor in April, also said he will quit the top post in the absence of stability.
“I will resign if there is no immediate action to form a government,” he further told reporters.
As he took over as the governor, 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 commercial banks, AFP further reported.
The economic and energy crisis in Sri Lanka was triggered due to a shortage of foreign exchange and it has left the country nearly bankrupt.
The shortage of fuel, cooking gas, food and essential items is one of the most worrying aspects of the crisis. For months, people have been forced to stand in lines to buy essentials.
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The protests, which remained peaceful for weeks, have now turned violent as several citizens blamed the ruling Rajapaksa family for the crisis.
A report by news agency Bloomberg said that eight people have died and more than 200 have been injured in violent attacks in the past few days, where mobs set fire to buildings and vehicles.
There have also been fears of a military coup in the island nation. However, a top Sri Lanka defence official on Wednesday ruled out the possibility of a military takeover.
Former Prime Minister Mahinda Rajapaksa is currently at the Trincomalee naval base after he was evacuated from his official residence, which was set on fire on Monday.
(With inputs from AFP, Bloomberg)