Skip to content
Search

Latest Stories

Crisis-hit Sri Lanka hikes rates as protests spiral

Crisis-hit Sri Lanka hikes rates as protests spiral

CASH-STRAPPED Sri Lanka's central bank hiked interest rates by a record 700 basis points on Friday (8) as police fired tear gas at hundreds of students protesting over the economic crisis.

Severe shortages of food and fuel, alongside lengthy electricity blackouts, have led to weeks of widespread anti-government demonstrations - with calls for President Gotabaya Rajapaksa to resign.

The latest protests saw students try to march on Friday to the national parliament, and police used water cannons in efforts to disburse the angry crowds.

Monks, who had largely rallied the Sinhala-Buddhist majority to elect Rajapaksa at the November 2019 polls, were also seen joining demonstrations in the capital Colombo, where some defiantly stood opposite police wearing gas masks and holding riot shields.

Demonstrators nationwide carried placards saying "Gota go home", demanding Rajapaksa and his administration step down over the country's worst economic crisis since independence in 1948.

The Central Bank of Sri Lanka said its benchmark lending rate had been raised to 14.5 per cent to "stabilise the exchange rate" after the rupee tumbled over 35 per cent in a month.

The rate for deposits was also increased by seven percentage points to 13.5 per cent as reports said Sri Lanka's rupee was the worst-performing currency in the world, edging out the Russian ruble.

The bank's newly appointed governor, Nandalal Weerasinghe, said attempts to control foreign exchange markets and keep interest rates artificially low in the past year had contributed to the unprecedented economic chaos.

"We are now in damage control mode," Weerasinghe said at his first press conference since replacing Ajith Cabraal, who was virtually forced out with the country facing bankruptcy.

"We would not have had to make such a sharp increase if rates had been raised incrementally over a period of time," Weerasinghe said, vowing to relax exchange controls introduced by his predecessor.

The bank said the shock-treatment rate hike was due to its belief that the embattled island's inflation, already at record levels, could get worse.

The Colombo Consumer Price Index rose 18.7 per cent in March while food inflation topped 25 per cent, but private analysts placed inflation at over 50 percent in the month.

Colombo-based diplomats from European Union member states, which form a key export market for Sri Lanka, on Friday asked the government to immediately begin reforms to revive the economy.

"We stress the extreme urgency of the situation, which requires the authorities to start in-depth discussions with the International Monetary Fund," the diplomats said in a joint statement.

Opposition parties have rejected a presidential overture to form a unity administration and instead joined calls for Rajapaksa to step down.

The shortages of essentials have been caused by a wide-ranging import ban as Sri Lanka seeks to conserve its meagre foreign currency reserves to pay its debts.

In recent years the vital tourism sector has also been hit hard by Islamist bomb attacks in 2019 and the coronavirus pandemic, which dried up remittances from Sri Lankans abroad.

Economists say the crisis has been exacerbated by government mismanagement, years of accumulated borrowing and ill-advised tax cuts.

(AFP)

More For You

largest venomous spiders

Macrothele Calpeiana

University of Granada

One of Europe's largest venomous spiders spotted in UK

In a surprising discovery, one of Europe’s largest venomous spiders, Macrothele calpeiana, has been found in the UK. The spider, which is native to southern Spain, was spotted in a West Sussex nursery after being transported to the country in a shipment of olive trees. Known for its striking size and long legs, this funnel-web spider is a rare sight in the UK, prompting both intrigue and concern among locals.

The spider was first seen by a forklift driver at the nursery, who noticed the large arachnid moving through the yard. Specialists later identified it as Macrothele calpeiana, one of the largest spiders found in Europe. Its bite, although venomous, is not known to be fatal to humans. Experts have reassured the public that while the spider’s venom can cause painful symptoms such as swelling and irritation, it poses no serious threat.

Keep ReadingShow less
Donald-Trump

Speaking from the Oval Office on Friday, Trump said the US has been economically and financially 'ripped off' by several countries, including India. (Photo: Getty Images)

Trump says India has agreed to reduce tariffs

US PRESIDENT Donald Trump said India has agreed to reduce its tariffs "way down," reiterating his claim that the country imposes high tariffs on American products, making trade difficult.

Speaking from the Oval Office on Friday, Trump said the US has been economically and financially "ripped off" by several countries, including India.

Keep ReadingShow less
Rachel-Reeves-Getty

Reeves is expected to announce welfare spending cuts worth billions of pounds in the Labour government's Spring Statement on March 26. (Photo: Getty Images)

Welfare system too costly, needs reform: Rachel Reeves

CHANCELLOR Rachel Reeves said on Friday that the UK’s welfare system is "costing too much" and must be reformed as the government faces financial pressures from high inflation and borrowing.

Reeves is expected to announce welfare spending cuts worth billions of pounds in the Labour government's Spring Statement on March 26. The statement will be a follow-up to her first budget last October, according to reports this week.

Keep ReadingShow less
Thousands stranded as World War II bomb halts travel

Passengers queue to take a bus from Opera district, in order to reach Paris Charles-de-Gaulle Airport (CDG), as train traffic has been stopped at the Gare du Nord station in Paris on March 7, 2025, following the discovery of a World War II bomb. (Photo by GEOFFROY VAN DER HASSELT/AFP via Getty Images)

Thousands stranded as World War II bomb halts travel

THOUSANDS of passengers in Paris and London were stranded on Friday (7) after the discovery of a World War II bomb on tracks leading to the Gare du Nord station halted traffic at France's busiest railway terminus.

All traffic to the train station, which serves international, high-speed and local connections, was halted as police worked to disable the device. All Eurostar trains in Paris were cancelled.

Keep ReadingShow less
Kyle-Clifford-Reuters

Clifford had previously pleaded guilty to the murders of BBC sports commentator John Hunt’s wife and two daughters at their home in northwest of London, in July 2024. (Photo: Hertfordshire Police /Handout via REUTERS)

Crossbow murderer found guilty of raping ex-girlfriend

A 26-YEAR-OLD man who murdered three women in a crossbow and stabbing attack has been found guilty of raping one of them, his ex-girlfriend, a British court ruled on Thursday.

Kyle Clifford had previously pleaded guilty to the murders of BBC sports commentator John Hunt’s wife and two daughters at their home in Bushey, northwest of London, in July 2024.

Keep ReadingShow less