Current AffairsInternational

Sri Lanka declares Economic Emergency

Sri Lankan President has declared an economic emergency to contain soaring inflation after a steep fall in the value of the country’s currency caused a spike in food prices. The Sri Lankan rupee has fallen by 7.5 per cent against the US dollar this year.

  • The President has promulgated emergency regulations under the Public Security Ordinance on the supply of essential goods.
  • A former army general has been appointed by the government as the commissioner of essential services, with the power to seize stocks held by traders and retailers.
  • Authorities say they will take control of the supply of basic food items, including rice and sugar, and set prices in an attempt to control rising inflation. Month-on-month inflation rose to 6% in August, mainly due to high food prices.
  • The authorised officers will take steps to provide essential food items at a concessionary rate to the public by purchasing stocks of essential food items
  • These items will be provided at government guaranteed prices or based on the customs value on imported goods to prevent market irregularities.
  • The wide-ranging measure is also aimed at recovering credit owed to state banks by importers’=

Reasons for rising prices

  • The increase in the foreign exchange rate
  • The country, which is a net importer of food and other commodities, is witnessing a surge in coronavirus cases and deaths which has hit tourism, one of the country’s main foreign currency earners.
Tags: Current Affairs, International

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