Sri Lanka imposes curfew after protests over economic crisis turn violent

  • Turn off the street lights and shorten trading hours
  • The government is unable to pay for fuel imports
  • Crisis caused by the epidemic, tax cuts

COLOMBO (Reuters) – Police imposed an overnight curfew in several parts of Sri Lanka’s main city of Colombo early on Friday, an official said, after protests over the government’s handling of the country’s worst economic crisis in decades turned violent.

A Reuters witness said hundreds of protesters gathered near the private residence of President Gotabaya Rajapaksa in a suburb of Colombo late Thursday night, and they dispersed them using tear gas and water cannons.

Chief Police Officer Amal Ederiman said curfews had been imposed in four police departments in Colombo, the country’s commercial capital.

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A Reuters witness said protesters wearing motorcycle helmets broke down a wall and threw stones at police before setting a bus on fire on a road leading to Gotabaya’s home.

The island of 22 million people suffers from constant power outages of up to 13 hours a day because the government does not have enough foreign exchange for fuel imports. Read more

A spokesman said on Thursday that the International Monetary Fund will begin discussions with Sri Lankan authorities over a possible loan program in the coming days, as the government searches for a way out of the crisis. Read more

Energy Minister Pavithra Wanyarachi told reporters that the government is switching off street lights to save electricity, as persistent diesel shortages have led to more power outages and halted trading in the major stock market.

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The power outages add to the suffering of Sri Lankans who are already dealing with a shortage of necessities and high prices.

The Department of Statistics said Thursday that retail inflation reached 18.7% in March compared to the same period last year. Food inflation reached 30.2% in March, driven in part by a currency devaluation and last year’s ban on chemical fertilizers which was later reversed.

Demantha Mathew of First Capital Research said inflation was at its worst level in more than a decade.

Wanyarachi said a shipment of diesel under a $500 million credit line was expected from India on Saturday, but added that this would not solve the problem.

“Once that arrives, we will be able to reduce the hours of unloading, but until we get the rains, maybe sometime in May, the blackouts will have to continue,” she said.

“There is nothing else we can do.”

It said water levels in reservoirs feeding hydropower projects had fallen to record levels, while demand reached record levels during the hot dry season.

The exchange said in a statement that the Colombo Stock Exchange reduced daily trading to two hours from the usual four and a half hours due to a power outage for the rest of this week at the request of brokers.

But stocks fell after the market opened on Thursday and the CSE exchange suspended trading for 30 minutes – for the third time in two days – after its index tracking the leading companies fell more than 5%.

The crisis is caused by poorly timed tax cuts and the impact of the coronavirus pandemic along with historically weak government funding, which has led to a 70% drop in foreign exchange reserves in the past two years. Read more

(Reporting by Uditha Jayasinghe, writing by Devjyot Ghoshal, editing by Grant McCool and Alistair Bell

Our criteria: Thomson Reuters Trust Principles.

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