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Crisis-hit Sri Lanka halts share trading as protests spiral

COLOMBO (AFP) – Sri Lanka yesterday announced a five-day share trading halt after the crisis-hit country hiked interest rates and declared a default on its external debt during the traditional New Year holiday, as trade unions and top cricket stars joined protests demanding the president’s resignation.

The move came ahead of Colombo’s planned talks with the International Monetary Fund (IMF) in Washington tomorrow to negotiate a bailout as the country has run out of foreign exchange to finance even the most essential imports. The island nation is grappling with its worst economic downturn since independence in 1948, with regular blackouts and acute shortages of food and fuel in addition to record inflation.

The crisis has caused widespread misery for Sri Lanka’s 22 million people and led to weeks of anti-government protests.

Several trade unions joined demonstrators laying siege to President Gotabaya Rajapaksa’s seafront office for an eighth straight day yesterday, demanding that he and his government quit, with thousands of health sector trade workers marching to the Galle Face promenade to join the protest.

Colombo Stock Exchange (CSE) officials said they were under pressure from brokers and investors not to re-open tomorrow to prevent an anticipated collapse of the market.

The CSE said regulators had expressed concerns over the “ability to conduct an orderly and fair market” and it would remain closed until Friday due to the “present situation in the country”.

The central bank almost doubled its benchmark interest rate to 14.5 per cent following the close on April 8, the last trading day before the holiday. And in the face of an unprecedented forex crisis the government on Tuesday declared it was suspending interest and capital payments on its huge foreign debt.

Sri Lanka’s economic crisis has sparked a wave of anti-government protests. PHOTO: AFP