Sri Lanka begins two-week shutdown

Sri Lanka closed schools and halted non-essential government services on Monday, beginning a twoweek shutdown to conserve fastdepleting fuel reserves as the IMF opened talks with Colombo on a possible bailout.

The country of 22 million people is in the grip of its worst economic crisis after running out of foreign exchange to finance even the most essential imports including food, fuel and medicines. On Monday schools were shut and state offices worked with skeleton staffing as part of government plans to reduce commuting and save precious petrol and diesel.

Sri Lanka is facing recordhigh inflation and lengthy power blackouts that have contributed to months of protests -- sometimes violent -- calling on President Gotabaya Rajapaksa to step down.

Thousands of students marched through the streets of Colombo on Monday chanting “Gota go home” in reference to the president, who they accuse of corruption and mismanagement. Police arrested 21 student activists who blocked all gates to the presidential secretariat building while declaring Monday, Rajapaksa’s 73rd birthday, a “day of mourning” for the nation.

Officers said the students had blocked Sri Lanka’s finance ministry secretary from attending a key meeting with officials from the International Monetary Fund (IMF).

But the office of PM Ranil Wickremesinghe said talks with a visiting IMF delegation, the first in-person discussions since Sri Lanka asked for a bailout in April, went ahead as planned. Both sides said the talks would continue until the end of the month.

A financial rescue plan is not expected until Colombo agrees with its creditors on restructuring its $51 billion foreign debt, a process that could take months, according to both Sri Lankan and IMF officials.

The country defaulted on its debt in April and went cap-inhand to the IMF which has asked

Colombo to raise taxes and restructure loss-making state enterprises.

AN AMENDMENT TO THE CONSTITUTION THAT COULD CURB THE PRESIDENTIAL POWERS WAS ALSO APPROVED BY SRI LANKA'S CABINET

‘US to help Pak with IMF talks on bailout package’

The US has agreed to help cashstrapped Pakistan negotiate a deal with the IMF for the revival of the country’s economic bailout programme with the global lender, a media report.

Pakistan and the IMF have not yet been able to reach close to a staff-level agreement for the revival of the Extended Fund Facility (EFF), leaving Pakistani authorities in a tight spot to bridge the gap and get the updated federal budget for the fiscal year 2022-23 passed by the National Assembly, the Dawn newspaper reported.

As the largest shareholder, the US has considerable influence over its decision-making.