Colombo: Central Bank of Sri Lanka Governor Nandlal Weerasinghe said on Wednesday that the country’s economy will collapse if a new government is not formed within two days to restore political stability.
Weerasinghe said the fresh wave of mob violence derailed the bank’s recovery plans and that the Prime Minister’s resignation on Monday and the lack of replacement were complicated matters.
‘Political stability important’
According to AFP, the governor of the central bank said that political stability is important for implementing economic reforms aimed at addressing the country’s debt crisis and acute shortage of foreign exchange to import essential goods. “If the government is not formed in the next two days, the economy will collapse completely and no one will be able to save it,” he said.
“The country was going downhill fast when I took over a month ago. I thought we would be able to apply the brakes but after Monday’s incidents, the brakes are not working,” Virsinghe said.
‘Then I will resign’
The central bank chief said, “Within a week or two, the economy will be completely devastated. No one will be able to save Sri Lanka at that stage. Having me here as governor will not help… to form an immediate government.” I will resign if action is not taken.”
“If we don’t have political stability, very soon the little petrol and diesel we have left with us will run out. At that time people will take to the streets to protest peacefully or violently,” said Veerasinghe.
Debt-ridden Sri Lanka has been grappling with an unprecedented economic turmoil since its independence from Britain in 1948. The crisis is due to the lack of foreign exchange, the country cannot pay for the import of staple food items and fuel.
Violence erupts after PM Rajapaksa’s resignation.
Mahinda Rajapaksa (76) on Monday resigned as prime minister amid nationwide protests over the government’s “failure” to deal with the economic crisis. Hours after his supporters attacked anti-government protesters, authorities imposed a nationwide curfew and deployed army personnel in the capital. After this attack, widespread violence started against the pro-Rajapaksa leaders. Sri Lanka has been rocked by violence in which at least nine people have been killed and more than 200 have been injured.
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