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Updated April 17th, 2022 at 08:01 IST

Sri Lanka stock exchange to stop trading for 5 days from April 18 amid deepening crisis

As the island nation reels under the worst economic crisis since its independence, Colombo Stock Exchange (CSE) was left with no option but to halt trading.

Reported by: Zaini Majeed
Sri Lanka
IMAGE: Unsplash | Image:self
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Securities And Exchange Commission of Sri Lanka has announced on Saturday, April 16, that it is in discussion with the Colombo Stock Exchange to suspend the stock market for five business days effective from April 18, Monday. As the island nation reels under the worst economic crisis since its independence, Colombo Stock Exchange (CSE) was left with no option but to temporarily halt trading.

This would give the investors more timeframe window to plan further, keeping in mind the country’s economic conditions. The order was communicated by board of directors of the Colombo Stock Exchange to the Sri Lanka's Securities and Exchange Commission (SEC), according to several reports. 

In a statement published on Saturday, country’s Securities and Exchange Commission (SEC) said that it is “of the view that it would be in the best interests of investors as well as other market participants if they are afforded an opportunity to have more clarity and understanding of the economic conditions presently prevalent, in order for them to make informed investment decisions.”

In a statement on their website, the securities regulators said that many other stakeholders of the securities market, including the Colombo Stock Brokers Association, “have also sought the temporary closure of the market on the same grounds”.

“The SEC has carefully considered the grounds that have been adduced by them and has evaluated the impact the present situation in the country could have on the stock market, in particular the ability to conduct an orderly and fair market for trading in securities,” the Securities And Exchange Commission of Sri Lanka went on to add.

Sri Lanka needs at least $3 billion and $4 billion this year to pull itself out of an unprecedented economic crisis and control the rising inflation that has led to dearth of essential commodities. It is also trying to make a “decent case” before the IMF for financial support. 

Sri Lanka to hold talks with IMF on 18th April

Sri Lanka will hold economic and monetary discussions with the International Monetary Fund (IMF) on April 18 where it will attempt to secure at least $4 billion in aid to pull the economically battered country out of its looming economic crisis. During a press call with the country’s reporters, Sri Lanka’s Finance Minister, Ali Sabry said that the nation might need an estimated 3-4 billion cash injections "from external sources for the rest of the year", Sri Lankan newspaper Colombo Page reported citing an interview given by the latter to Bloomberg. 

The burden of the mounting debt is out of the question, the Finance Minister reiterated, adding that the government is now focusing on supporting the “balance of payment crisis and continuous supply of fuel”.

Other major concerns that Sabry cited included power shredding, shortage of gas, and a high inflation rate. Sabry emphasised that Sri Lanka needs a social protection net to protect the population below the poverty line from the devastating aftermath of the rising inflation and skyrocketing commodity prices.

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Published April 17th, 2022 at 08:01 IST

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