Eyes of the India

Country’s central bank governor says the action is being taken in good faith, and nation has never defaulted on its debt payments Sri Lanka will temporarily suspend foreign debt payments to avoid a hard default, the central bank governor said on Tuesday, with its limited foreign reserves required for imports of essential items such as fuel. “It has come to a point that making debt payments are challenging and impossible. The best action that can be taken is to restructure debt and avoid a hard default,” Governor P Nandalal Weerasinghe said. Sri Lanka is due to start talks with the International Monetary Fund on a loan programme next week, with the country suffering from prolonged power cuts alongside shortages of food and medicines. The island nation’s foreign reserves stood at a paltry $1.93 billion at the end of March, with foreign debt payments of around $4bn due this year, including a $1bn international sovereign bond maturing in July. The governor said the action was being ta...

  Countrywide protests flare up over shortages in fuel, gas and other essentials A state of emergency in Sri Lanka has been revoked after mass protests calling for President Gotabaya Rajapaksa to be removed as the country’s economic crisis worsens. On Tuesday, Mr Rajapaksa issued a decree revoking the state of emergency , which gave him sweeping powers, days after it was declared. Protests were sparked by shortages in fuel and gas, electricity and other essentials but, after spreading across the country, led to calls for the president to step down as members of his own party called for an interim government to take over. The president’s ruling party is now a minority in parliament after 42 legislators from his coalition declared they were no longer affiliated with it. “If we don’t act now, there will be a river of blood in the country,” said Wijeyadasa Rajapakshe, one of the latest members to defect from Mr Rajapaksa’s party. “We have to forget party politics and ensure an interi...