Sri Lanka Suffers Rolling Blackouts Amid Worsening Economic Crisis
Sri Lankan citizens were left without power for most of the day on Wednesday, as the country lapses into a deepening economic crisis that is leading to mass fuel and energy shortages.
Sri Lanka had no choice but to cut power for 10 hours on Wednesday while warning of further blackouts on Thursday, after being unable to pay for fuel shipments as the government grapples with a foreign exchange shortage. “We made a request to the government to allow the public sector, which is about 1.3 million employees, to work from home for the next two days so we can manage the fuel and power shortages better,” Sri Lankan Public Utilities Commission Chairman Janaka Ratnayake told Reuters.
The South Asian country’s foreign exchange reserves slumped by about 70% since 2019 to a meager $2.31 billion as of February, forcing the country into a deep state of fuel and food shortages. The latest power shortages were the result of the government’s inability to pay $52 million for a 37,000 tonne diesel shipment that is pending unloading at the country’s port. “We have no forex to pay,” said Ratnayake.
Sri Lanka is expected to make a bid to the International Monetary Fund (IMF) for assistance come April, as the nation’s economy succumbs to a worsening crisis sparked by years of deteriorating government finances, the Covid-19 pandemic, and poorly-timed tax cuts.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
