In order to ease the devastating economic crisis in the country, Sri Lankan ministers will waive their salaries, Prime Minister Ranil Wickremesinghe announced on Thursday. In a statement, the newly appointed leader said the decision was made in an effort to ease public spending and would also see a cap on other benefits Sri Lankan lawmakers enjoy to date. Notably, the new cabinet is expected to be sworn in later today, according to government sources.
1. Ministerial Salaries and Privileges:
With a view to reducing public expenditure; new cabinet ministers to the government will waive ministerial salaries while a limit will be placed on other benefits they have enjoyed to date.#SriLankaEconomicCrisis
— Ranil Wickremesinghe (@RW_UNP) May 19, 2022
This comes as the virtual mission of the International Monetary Fund (IMF) is expected to conclude technical discussions on a possible IMF lending program on May 24, Ada Derena reported quoting Fund spokesperson Gerry Rice. Earlier in mid-April, Sri Lanka requested financial assistance from a global financial institution. “The (Foreign Minister) requested a Rapid Financing Instrument (RFI) to alleviate the current supply chain issues, but initially the IMF felt that it did not meet their criteria,” he said. said assistant to Finance Minister Ali Sabry, Shamir Zavahir. on Twitter.
India eases settlement rules
Meanwhile, India has allowed Sri Lanka to settle its $1 billion credit facility in rupees. The Reserve Bank of India (RBI) said on May 19 that the Indian government-backed $1 billion credit facility that has been extended to Sri Lanka to purchase essential goods can be settled in Indian rupees, apart from the Asian Clearing arrangement. Arrangement of Union (ACU).
What’s going on in Sri Lanka?
Sri Lanka – dubbed the pearl of the Indian Ocean – is facing the worst economic crisis in its history. A severe shortage of foreign currency has prevented the Rajapaksa administration from paying for essential imports, sparking an unprecedented battle for commodities. The country has also sharply devalued its currency in recent weeks, bringing the value of the Sri Lankan rupee to 360.21 against the US dollar (Friday). All this triggered massive protests in the country which eventually led to the resignation of Mahinda Rajapaksa from the post of Prime Minister and the appointment of Ranil Wickremesinghe as his replacement. As the situation unfolds, the administration has knocked on the doors of India, China as well as the IMF for financial assistance.