The extraordinary step underscores the crisis facing a government that is struggling to contain soaring inflation, large-scale protests and a potentially looming humanitarian disaster.
Motorbikes and three-wheeler vehicles line up to fill their tanks at a gas station in Colombo on April 12.
The Rajapaksa government — led by Gotabaya Rajapaksa and his brother, Prime Minister Mahinda Rajapaksa — is seeking a bailout from the International Monetary Fund at a meeting in Washington scheduled for next week.
Rajapaksa announced steep tax cuts — a promise made during his 2019 campaign — while Sri Lanka’s trade deficit plunged in recent years as tourism, a crucial source of foreign currency, evaporated during the coronavirus pandemic. As Sri Lanka’s dollar reserves dried up and inflation began to bite, residents have borne the brunt of a 30 percent rise in food prices and lines at gas stations lasting hours every day. In recent days, some officials have warned about the possibility of mass hunger.
In an interview before the default announcement, Ali Sabry, the finance minister appointed by Rajapaksa on April 4 to replace his brother, said he did not believe that Sri Lanka would face mass shortages of food and medicine and that the government was in talks with multilateral institutions including the World Health Organization, as well as neighboring countries such as India, about emergency supplies in case of a crisis.
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