Sri Lanka's coffers were emptied, a crisis was imposed due to the food crisis

Shri Jayawardenepura Kotte, Ta. Tuesday 31st August 2021

Sri Lanka is facing a difficult economic crisis. Sri Lanka has declared a state of emergency due to the food crisis, as private banks have a shortage of foreign exchange for imports. President Gotabaya Rajapaksa said he has taken steps to curb the hoarding of sugar, rice and other essential food items. Emergency rules and law enforcement have been ordered.

The Rajapaksa has appointed a high-ranking army official as the commissioner general of essential services for the supply of grain, rice, sugar and other consumer goods. The crisis was announced after a sharp rise in prices of sugar, rice, onions and potatoes, while shortages of milk powder, kerosene and cooking gas led to long lines outside shops.

The Sri Lankan government has imposed heavy fines to curb food hoarding. The crisis comes at a time when the country of 2.1 crore people is battling a major wave of Corona virus. In Sri Lanka, more than 200 people die from coronary heart disease in a single day.

Sri Lanka's economy contracted by a record 3.6 percent in 2020 due to the Corona epidemic. In March last year, the government banned the import of vehicles and other items, including spices, edible oil and turmeric, necessary to protect foreign exchange. Importers still say they do not have dollars to pay for food and medicine purchases. Importers can buy these foods from outside in dollars only.

Two weeks ago, Sri Lanka's central bank raised interest rates to strengthen the local currency. Bank figures show that Sri Lanka's foreign reserves fell to 2. 2.8 billion at the end of July, from 7. 7.5 billion in November 2019. When the government took power and the Sri Lankan currency lost more than 20 percent of its value against the US dollar at the time.

Energy Minister Uday Gamnapila has appealed to motorists to reduce their use of fuels like petrol and diesel so that the country can use its foreign exchange to buy essential medicines and corona vaccines.