Part of: Prelims and GS – II – International Relations
Context Sri Lanka has declared an economic emergency, after a steep fall in the value of the South Asian country’s currency caused a spike in food prices.
The Sri Lankan rupee has fallen by 7.5 per cent against the US dollar this year.
Steps to be taken to control price rise
The President has promulgated emergency regulations under the Public Security Ordinance on the supply of essential goods.
A former army general has been appointed by the government as the commissioner of essential services, with the power to seize stocks held by traders and retailers.
Authorities say they will take control of the supply of basic food items, including rice and sugar, and set prices in an attempt to control rising inflation.
Month-on-month inflation rose to 6% in August, mainly due to high food prices.
The authorised officers will take steps to provide essential food items at a concessionary rate to the public by purchasing stocks of essential food items
These items will be provided at government guaranteed prices or based on the customs value on imported goods to prevent market irregularities.
The wide-ranging measure is also aimed at recovering credit owed to state banks by importers’=
Reasons for rising prices
The increase in the foreign exchange rate
The country, which is a net importer of food and other commodities, is witnessing a surge in coronavirus cases and deaths which has hit tourism, one of the country’s main foreign currency earners.
