The nation has recently gone through its worst-ever economic crisis. This unprecedented catastrophe was brought on by poor financial management, unscrupulous officials, and natural disasters in rural areas. The government’s inept handling of the economy has contributed significantly to the sharp rise in inflation.
In order to meet its need for essential goods, Sri Lanka must import a variety of things such as food, paper, sugar, lentils, pharmaceuticals, and transportation equipment. Due to a scarcity of available foreign currency, it will be unable to buy or import certain essential commodities.
It is anticipated that there would be a serious lack of food in conjunction with the financial disaster. The decline in the value of the currency has led to a rise in the prices of various foods. Because of this, the administration felt it had no choice but to issue a national economic emergency proclamation on August 31st, 2022.
Power and Energy Minister Kanchana Wijesekera informed Parliament that Sri Lanka does not have any dollars to pay for gasoline supplies. He pleaded with members of the public to keep any savings they had from the previous two days. Wijesekera informed Parliament that Sri Lanka does not have any dollars to pay for gasoline supplies.
According to the cross-currency exchange rate system, the value of the Sri Lankan rupee decreased relative to the value of the Indian currency by 31.6%, the value of the euro by 31.5%, the value of the pound sterling by 31.1%, and the value of the Japanese yen by 28.7% during the year leading up to April 1, 2022. The value of one US dollar fell by 33% against other currencies.
Sri Lanka is laying the groundwork for a rapid expansion of its financial sector at the present time.