Sri Lanka’s rupee has plummeted to a historic low, making it the world’s poorest-performing currency, adding to the country’s greatest economic crisis since independence in 1948.
“After Rajapaksa ended emergency rule mere days after it was established, the Sri Lankan rupee hovered near Sri Lankan Rupee 302.04 per US dollar on Wednesday, trailing even Russia’s rouble.” According to the Financial Times.
Last Monday, the 22-million-strong island nation’s diesel supply ran out, causing a massive power outage.
The economic crisis brought on by a low foreign exchange reserve has spurred anti-government protests around the country, some of which have become violent.
Sri Lanka has been roiled by violent protests for the past week, as public outrage over the government’s handling of the island’s economic crisis has spilled into the streets. Much has happened since then.
Many protestors disobeyed President Gotabaya Rajapaksa’s 36-hour curfew.He subsequently declared a state of emergency, which was widely condemned by the public and opposition MPs until being repealed by the President earlier today.
According to critics, the foundation of the crisis, which is the worst in decades, is economic mismanagement by successive governments, which established and maintained a dual deficit—a budget deficit as well as a current account deficit.
Sri Lanka’s foreign exchange reserves have plummeted by 70% in the last two years, to just $2.31 billion in February, leaving Sri Lanka unable to import basic necessities such as food and fuel.