Protests over the Sri Lanka economic crisis continue
Sri Lankan demonstrators will hold three-days of protests across the country from today in response to the ongoing economic crisis.
The demonstrations intend to pressure the resignation of President Gotabaya Rajapaksa as the country experiences a severe foreign exchange crunch and inflation of 18.7%. The economy relies upon the revenues from agriculture and tourism, which have been at their lowest levels in decades.
Colombo’s decision to transition into organic agriculture farming by banning the import of fertilizers works to save foreign exchange bills that would otherwise go towards fertilizer imports. The production of tea and rice, the primary sources of export and foreign exchange, has fallen by nearly 30%. Loss of exchange has led to a rapid depreciation of the country’s currency, the rupee.
The government will likely approach the International Monetary Fund (IMF) to secure monetary support, which the Fund is likely to grant. Additionally, Colombo might lift its complete fertilizer ban and increase the production of organic fertilizers. The move could help the country revive its surplus exports of tea and rice and improve bolstering its foreign exchange reserves in the medium term.
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