Former Deputy Governor of the Central Bank of Sri Lanka (CBSL) W. A. Wijewardena has highlighted the issues Sri Lanka could face due to the ongoing conflict between Russia and Ukraine.
Wijewardena pointed out the Russia-Ukraine conflict seems to be drawn longer and Sri Lanka is the biggest casualty.
He explained that due to the conflict an increase in the prices of fuel and Liquid Natural Gas (LNG) is on the cards.
The former CBSL Deputy Governor also warned that without foreign exchange Sri Lanka cannot afford fuel or LNG.
Wijewardena added that power, transport, water supply, and factory operations will have to be curtailed as a result.
In a Twitter message, he likened the situation to a man falling from a tree being gored by many bulls.
Earlier it was reported that Sri Lankan shares ended 5% lower yesterday as the country struggles with its worst economic crisis in years, while global stock markets slumped after Russia’s invasion of Ukraine.
The benchmark index witnessed its worst day in over a year and closed at its lowest level in more than three months.
Sri Lanka’s central bank yesterday said the country had not sought any “restructuring” assistance for its debt, amid a worsening economic crisis that has seen essential imports stalled due to a lack of foreign exchange.
The Sri Lankan rupee weakened to 202 against the dollar, hitting its lowest level in over 10 months
Earlier this week, a cabinet spokesman had said that a war in Ukraine would really hurt Sri Lanka as the country faces an acute fuel shortage.
Oil prices broke above $100 a barrel for the first time since 2014 on Thursday after Russian President Vladimir Putin launched an invasion of Ukraine.
Meanwhile, Sri Lanka’s top sources of tourism income are Russia and Ukraine, with a large number of tourists from the two countries have visited Sri Lanka in the last year.
Due to the uncertainty as a result of the ongoing conflict between the two countries, Sri Lanka is expected to see a drop in tourists from Russia and Ukraine.
According to the Sri Lanka Tourism Development Authority (SLTDA), more than 45% of the tourist arrivals to Sri Lanka from 1st January to 24th February are either from Russia or Ukraine. (NewsWire)
