Sri Lankan central bank chief warns of further economic downfall if political stability not achieved

Colombo [Sri Lanka], May 11 : Sri Lanka's economic situation will worsen if political stability is not achieved, the country's Central Bank Governor Nandalal Weerasinghe warned on Wednesday as the island nation continued to witness large-scale violence.
Addressing a media briefing in Colombo, Weerasinghe said he has conveyed to President Gotabaya Rajapaksa and other political leaders that he would step down from the post, if the current political crisis is not solved in the coming weeks.
The central bank chief said that it was challenging to revive an economy in a country where law and order was not maintained, and reiterated that political stability was paramount, the Daily Mirror newspaper reported.
He said if the current situation continues, things could get worse with prolonged power cuts, massive shortages of fuel and other essential items.
This comes as Prime Minister Mahinda Rajapaksa resigned on Monday as violence erupted in the country. A number of violent incidents have taken place in the country after pro-government groups clashed with anti-government protesters on Monday, leaving eight people dead and over 200 others injured.
Weerasinghe pointed out that without a legitimate government with a prime minister, cabinet and finance minister, Sri Lanka would not be able to proceed with debt restructuring and negotiations with the International Monetary Fund to seek economic assistance.
He said usable foreign reserves were barely enough to finance one week of imports.
Sri Lanka has been suffering from the worst economic crisis in the country's history. The economic situation was caused by shortages of foreign currency as tourist flows dried up during the COVID-19 pandemic, preventing the country from purchasing enough fuel.
The pandemic has also negatively impacted remittances from Sri Lankans working abroad.