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.