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Economic emergency in Sri Lanka, Food prices soar: Covid

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Just after an abrupt fall in the value of Sri Lanka’s currency, the country declared an economic emergency. This caused a spike in the food prices.

Authorities say they will take control of the supply of basic food items, including rice and sugar, and set prices to try to control the increasing inflation.

This year, Sri Lanka’s currency has fallen by 7.5% against the US dollar.

And because of this, a wide-ranging emergency was declared on Tuesday.

The government has appointed a former army general as the commissioner of essential services. He has the power to seize stocks held by traders and retailers.

“The authorised officers will be able to take steps to provide essential food items at concessionary rate to the public by purchasing stocks of essential food items,” the president of the island nation, Gotabaya Rajapaksa, said in a statement.

“These items will be provided at government guaranteed prices or based on the customs value on imported goods to prevent market irregularities,” the statement added.

Since the announcement came after a surge in the cost of basic foodstuffs, long queues have started to form outside shops. 

Everyone wants to purchase the necessities before the stoke runs out due to shortage. 

The Country’s Department of Census and Statistics said the increase in the foreign exchange rate was one of the reasons behind the rising prices of many indispensable items over the last year.

The inflation percentage rose every month and now it has reached 6% in August. It is mainly due to high food prices, the department said.

 

Sri Lanka, which is a net importer of food and other supplies, is beholding a surge in coronavirus cases and deaths which has hit tourism, one of the country’s major sources of income.

Tourism might also be the reason behind a decline in Sri Lanka’s economy by a record 3.6 previous year.

In March last year, the government levied an import ban on vehicles and other items as it tried to stem the outflow of foreign currencies.

Earlier this month, Sri Lanka became the first country in the region to raise interest rates in an attempt to support its currency and help ease the inflationary pressure of the high cost of imports.

Sri Lanka is currently under a 16-day curfew until Monday because of a jump in Covid-19 cases.

 

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