Economic Emergency Declared in Sri Lanka | Daily Current Affairs 2021

Economic Emergency Declared in Sri Lanka

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Sri Lanka Economic Emergency

Sri Lanka Economic Emergency: Sri Lankan President Gotabaya Rajapaksa recently declared an economic emergency in the country.

Key Details:

  • The emergency was declared to contain soaring inflation after a steep fall in the value of the South Asian country’s currency caused a spike in food prices.
  • The state of emergency was declared under the public security ordinance to prevent the hoarding of essential items, including rice and sugar.
  • The Sri Lankan Government has also increased penalties for food hoarding.
  • The president promulgated emergency regulations under the Public Security Ordinance on the supply of essential goods.
  • The wide-ranging measure is also aimed at recovering credit owed to state banks by importers.
  • But shortages of food come as Sri Lanka battles a fierce coronavirus wave, claiming more than 200 lives a day.

What is the reason for rising prices?

  • The Sri Lankan rupee has fallen by 7.5 percent against the US dollar this year.
  • 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.
  • President also named a top army officer as “Commissioner General of Essential Services to coordinate the supply of paddy, rice, sugar and other consumer goods”.
  • This move followed sharp price rises for sugar, rice, onions and potatoes.
  • The price rise was supplemented by long queues outside stores because of shortages of milk powder, cooking gas, and kerosene oil.
  • A presidential aide has warned that fuel rationing may also be introduced by the end of the year unless consumption was reduced.

About Sri Lanka:

  • Sri Lanka, officially the Democratic Socialist Republic of Sri Lanka, is an island country in South Asia.
  • It is located in the Indian Ocean to the southwest of the Bay of Bengal and to the southeast of the Arabian Sea.
  • The capitals of Srilanka are Colombo and Sri Jayawardenepura Kotte.
  • Sri Jayawardenepura Kotte is the legislative capital while Colombo is the largest city and center of commerce.
  • The currency used here is the Sri Lankan rupee.
  • The current President and Prime Minister of Srilanka are Gotabaya Rajapaksa and Mahinda Rajapaksa respectively.

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