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Governor Of Sri Lankan Central Bank Resigns As Country Is Plunges Into Financial Crisis


04/04/2022


Governor Of Sri Lankan Central Bank Resigns As Country Is Plunges Into Financial Crisis
As the country faces its worst economic crisis in decades, the governor of Sri Lanka's central bank has announced his retirement.
 
After all of the country's cabinet ministers resigned, Ajith Nivard Cabraal made his announcement. Angry protestors have also demanded the resignation of the country's prime minister and president.
 
The government has been unable to pay for crucial imports, like as petroleum, due to a chronic scarcity of foreign currency. The island nation of 22 million people is experiencing its worst economic crisis since gaining independence from the United Kingdom in 1948.
 
On Tuesday, the central bank was expected to issue an interest rate decision.
 
According to a central bank official, there are presently no intentions to postpone the announcement.
 
As the bank strives to stabilise the Sri Lankan currency, Asia Securities' Lakshini Fernando anticipates the bank to hike its main interest rate by at least two percentage points. Since the currency was devalued last month, it has lost more than 30% of its value versus the US dollar.
 
While the market is likely to respond positively to Cabraal's retirement, Fernando told the BBC that "the key will be who takes over at this stage."
 
"We definitely need more clarity on policy for a stronger momentum," she said.
 
Demonstrators have taken to the streets of Colombo, the capital, as homes and businesses have been without power for up to 13 hours at a time.
 
Sri Lankans are also grappling with shortages and rising prices as a result of the country's sharp devaluation of its currency last month in preparation for bailout talks with the International Monetary Fund (IMF).
 
It comes as 26 Sri Lankan ministers have resigned, but neither Prime Minister Mahinda Rajapaksa nor his brother, President Gotabaya Rajapaksa, have done so.
 
On Monday, Ali Sabry, President Rajapaksa's former counsel and the country's former justice minister, was sworn in as the country's new finance minister.
 
Cabraal was named the central bank's 16th governor in September of last year.
 
For over a decade, from July 2006 to January 2015, he served as the bank's 12th governor.
Cabraal also helped to more than triple the size of the Sri Lankan economy during his first tenure in office, according to the bank.
 
"Sri Lanka was able to preserve good and stable macro-economic fundamentals, with inflation kept low and financial system stability attained in a time of acute global uncertainties and volatility" with him in charge, the bank said.
 
 (Source:www.bbc.com)