Sri Lanka: New Cabinet ministers to forego salaries amid crisis; likely to take oath today

In a bid to mitigate the devastating economic crisis in the country, Sri Lankan ministers will forego their salaries, Prime Minister Ranil Wickremesinghe announced on Thursday. In a statement, the newly-appointed leader said that the decision was made in a bid to ease public expenditure and would also see a cap on other benefits enjoyed by Sri Lankan lawmakers to date. Notably, the new cabinet is scheduled to swear in later today, as per the government sources.

This comes as the virtual mission of the International Monetary Fund (IMF) is expected to conclude technical talks on a potential IMF loan programme on May 24, Ada Derena reported citing Fund spokesperson Gerry Rice. Earlier in mid-April, Sri Lanka asked for financial aid from a global financial institution. “The (foreign minister) made a request for a Rapid Financing Instrument (RFI) to mitigate the current supply chain issues, yet initially IMF of the view that it doesn’t meet their criteria,” the finance minister Ali Sabry’s aide Shamir Zavahir said on Twitter.

India eases settlement rules

Meanwhile, India has allowed Sri Lanka to settle its $1 bn credit facility to be settled in rupee terms. The Reserve Bank of India (RBI) on May 19 said the $1 billion credit facility backed by the government of India that has been provided to Sri Lanka to buy essential goods can be settled in the Indian rupee, outside of the arrangement of the Asian Clearing Union (ACU) arrangement.

What is happening in Sri Lanka?

Sri Lanka- nicknamed the pearl of the Indian Ocean- is facing its worst economic crisis ever. An acute shortage of foreign currency has left the Rajapaksa administration unable to pay for essential imports, thereby triggering a never seen battle for basics. The country has also steeply devalued its currency in recent weeks, taking the value of the Sri Lankan Rupee to 360.21 against the US dollars (on Friday). All this has triggered massive protests in the country which eventually led to the resignation of Mahinda Rajapaksa from the Prime Ministerial post and the appointment of Ranil Wickremesinghe as his replacement. As the situation unfolds, the administration has knocked on the doors of India, China as well as the IMF for financial help. 

(Image: AP)