Sri Lanka’s Central Bank chief threatens to quit if leaders failed to bring stability

COLOMBO: Sri Lanka’s Central Bank chief on Wednesday threatened to quit if the leaders failed to bring political stability to the island nation in the grip of its worst economic crisis since independence in 1948.

Governor of the bank Nandalal Weerasinghe said that the political unrest derailed the bank’s recovery plans, and the resignation of Mahinda Rajapaksa as the PM on Monday and the lack of a replacement were complicating matters.

“I have informed all political parties that I would resign if there will be no political stability,” said Weerasinghe, who has been in the job only for a month.

“When I took over, the crisis was as bad as this, and I hoped it would be resolved quickly so that the Central Bank could perform the job required, he said.

Weerasinghe has just commenced negotiating with the IMF for the possible bail-out package. Since Monday, with the resignation of the prime minister, there is no functioning finance minister. Weerasinghe said currently the country’s foreign reserves were not enough to import even the essentials.

“With the continuation of this situation, we will have to suffer power cuts between 10-12 hours, he warned. He said the 225 members of Parliament and the executive president have to resolve the political crisis.

Shortly after taking over last month as the apex bank’s chief, Weerasinghe announced defaulting on Sri Lanka’s external debt, saying the country had no money to pay its creditors.

Sri Lanka is facing its worst economic crisis since independence from Britain in 1948. Clashes broke out on Monday after government’s supporters attacked peaceful anti-government protest sites in Colombo and elsewhere, killing at least 8 people and leaving over 200 others injured in the violence.

Sri Lanka’s worst economic crisis has provoked widespread protests calling for political reform and the resignation of President Gotabaya Rajapaksa. On April 1, President Rajapaksa imposed a state of emergency, lifting it five days later. The government reimposed a state of emergency on May 6 after police fired teargas and arrested students protesting near parliament, which was adjourned until May 17.