If political stability is not established soon, the economic situation will deteriorate – CBSL chief

Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka (CBSL), believes that if political stability is not established soon, the country's economic situation will deteriorate significantly.

He stated today (11), at a press conference in Colombo, that the current situation, acts of violence, and failure to maintain law and order in the country will not help Sri Lanka get out of its current economic crisis.

He also stated that the country's political situation must be stable for the economy to recover.

The central bank chief expressed hope that the current situation can be resolved constitutionally and democratically as soon as possible to restore political stability.

"As the Central Bank, we must state that if such a stable condition cannot be achieved in a very short period, the current situation will worsen," he said.

He stated that the country is already in a foreign exchange crisis and that certain essential items are currently in short supply, even though fuel and gas stocks are available to some extent and power outages are limited to three hours.

However, if this situation persists for another two or three days, the country can expect power outages to return to 10-12 hours, as well as severe fuel shortages and long lines for gas cylinders, leading to more protests and public outbursts.

"We, the central bank, hope that political stability will come sooner and that as a result, we will be able to resume normal policy implementation so that we can at least find some foreign exchange to address these current shortages of essentials."

"And once we reach an agreement with the IMF, and even for that, we need a stable government, the cabinet, the parliament, the prime minister, and the finance minister; all are required."

"It is extremely difficult for us to make any progress without that kind of administration." That is why I reiterate the urgent need for this type of administration, as well as proper law and order in the country so that everyone can go about their normal daily lives."

He stated that the President and all Members of Parliament must work together to find a workable solution as soon as possible because otherwise, "there will be no progress in the country and everyone will have to experience more pain going forward if we don't have a solution soon."

Dr. Weerasinghe also stated that if political stability in the country is not restored within a week or two, he will resign as Governor.

In response to a question, he stated that when he took over one month ago, his personal expectation was that the situation would stabilize within two weeks and that they would then be able to successfully continue their economic program.

However, despite the passage of one month, the situation has only worsened, he said, adding that he has informed all political parties that if they do not work together to bring about some form of stability, no one, including him, will be able to rescue the country's economy.

The governor stated that he personally informed them that if this situation does not improve within the next week or two, he will resign.