PRESIDENT APPOINTS NEW PM TO EASE CRISIS
Ranil Wickremesinghe has been sworn in at a time when economic turmoil and widespread protests have led to political uncertainty
Sri Lankan President Gotabaya Rajapaksa swore in veteran politician Ranil Wickremesinghe as the country’s new prime minister yesterday.
Wickremesinghe, 73, had taken his oath of office, according to the media office of Rajapaksa, who is facing widespread protests demanding his resignation over the country’s worsening economic crisis.
Earlier, Rajapaksa also promised constitutional changes to give more power to the parliament, a long-held demand of the protesters. They have also demanded the amendment curtail the sweeping powers of the president’s office.
“I will give the opportunity for the new government and prime minister to start a new programme to take the country forward,” Rajapaksa said.
On Wednesday, it was reported that opposition leader Sajith Premadasa could be appointed prime minister if he was willing to accept the post. Premadasa had, in the past, rejected the likelihood of working under Rajapaksa.
Defence ministry secretary Kamal Gunaratne, an ally of Rajapaksa, said he hoped to lift a curfew by yesterday while denying that the state of emergency declared last week was a step towards military rule.
“We know people have difficulties. But we also have to protect people,” Gunaratne said. “We are called to calm the situation. We are under civilian government. When the situation is calm we will stay back.”
Gunaratne also confirmed that former premier Mahinda Rajapaksa, the president’s brother, was evacuated to Trincomalee naval base in the northeast after protesters stormed his residence in Colombo.
Sri Lanka’s central bank chief, meanwhile, imposed more capital controls and threatened to resign if politicians failed to return stability to the nation in the grip of its worst economic crisis since independence in 1948.
“I took on this responsibility with expectations that political stability will be established,” governor Nandalal Weerasinghe said on Wednesday. “It’s been more than a month with no progress. I do not wish to continue in this post if political stability is not achieved.”
His comments follow days of political violence, with clashes between pro- and anti-government groups pushing the prime minister to resign and dissolving his cabinet.
A government is essential to agree a loan from the International Monetary Fund or win crucial bridging loans from countries willing to bail out Sri Lanka.
The IMF has expressed concerns about the violence, adding that it continued “technical level” discussions to be ready for policy talks once a new Sri Lankan government was formed. If Weerasinghe stepped down, there would be a risk that even the technical talks may slow.
Apart from the IMF and debt-restructuring talks, Sri Lanka needed a finance minister to take essential steps including raising taxes and energy prices, Weerasinghe said. If revenues failed to grow, the central bank would have to print more money, he warned.
The central bank has raised interest rates by 850 basis points this year alone to fight inflation that had accelerated to a record of almost 30 per cent in April.
To curb black market transactions, the central bank planned to issue guidance to banks on the movement of the exchange rate, including a daily trading band for the rupee-dollar trade.