Sri Lanka stops trading stocks after interest rate hike

Sri Lanka halted stock trading for five days on Saturday (April 16) after an interest rate hike by its central bank.

The island nation of 22 million people has been rocked by its economic crisis since independence.

Demonstrators are protesting across Sri Lanka against rising fuel and food prices and power cuts that last up to 13 hours a day.

They call on the “tyrant and nepotistic government” of President Gotabaya Rajapaksa to resign.

One protester, Dani Karunanathan, told Reuters news agency: “We are fed up with this tyranny because there is so much nepotism here. The prime minister and the president are brothers and we really want them to leave. ‘here.”

Colombo Stock Exchange officials expressed concern about the “ability to run an orderly and fair market”.

It doubled its benchmark interest rate to 14.5 percent due to the “current situation in the country”.

Read also | Sri Lanka’s ‘debt default process has begun’, rating agencies warn

According to Governor P. Nandalal Weerasinghe, “The rate hike will give a strong signal to investors and markets that we will get out of this as soon as possible.”

“I want to be very clear that my message is not a message of blind positivity. Things are tough and we need to take decisive action. Things will get worse before they get better, but we need to apply the brakes. to this vehicle before it crashed,” he added.

“The President and I are spending every moment formulating solutions to get Sri Lanka out of the current crisis,” said Sri Lankan Prime Minister Mahinda Rajapaksa.

The country’s new finance minister, Ali Sabry, is coordinating with the International Monetary Fund and the World Bank to negotiate a financial package.

Former Justice Minister Sabry said: “I’m ready to do this for as long as it takes.”

Sri Lanka declared a default on its external debt worth $51 billion during the traditional New Year holiday.

“We cannot give up paying down the debt because the consequences are terrifying. There is no alternative, we have to restructure our debt,” Sabry said.

(With agency contributions)

Leslie M. Gill