Sri Lanka Central Bank Governor quits amid mounting economic crises

Colombo: Sri Lanka’s Central Bank Governor Ajith Nivard Cabraal, who had resisted calls for an IMF bailout, resigned on Monday amid escalating protests in the island nation over the mounting economic woes.

Cabraal, 67, announced his resignation in a Twitter post, after being elevated to this position less than seven months ago.

He stepped down after all members of Sri Lanka’s cabinet, apart from President Gotabaya Rajapaksa and his brother, Prime Minister Mahinda Rajapaksa, quit late on Sunday.

“In the context of all Cabinet Ministers resigning, I have today submitted my resignation as Governor @CBSL to the President Gotabaya Rajapaksa @GotabayaR #SriLanka #GoSL.” he tweeted.

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In September 2021, he replaced WD Lakshman to take over for his second term as Central Bank governor.

A former state minister of finance and a Member of Parliament since August 2020, Cabraal had earlier served as the Governor of the Central Bank of Sri Lanka between 2006 to 2015.

In his second stint, the veteran policy-maker displayed his proclivity on reducing reliance on foreign debts and was reluctant to seek a bailout package from the International Monetary Fund despite the Sri Lankan economy going into a tailspin.

Cabraal leaves office at a time when inflation in Sri Lanka is at an all-time high.

His resignation came hours after Sri Lankan President Gotabaya Rajapaksa on Monday removed his brother and Finance Minister Basil Rajapaksa from his post.

According to the Central Bank estimates, inflation and prices of essentials have surged to 17.5 per cent in February this year, and are expected to rise in the coming months due to the devaluation of the Sri Lankan currency.

On Sunday, the entire cabinet apart from President Gotabaya Rajapaksa and his brother Mahinda, the Prime Minister, resigned against the mounting economic crisis and the social media ban that failed to quell anti-government protests.

The island nation has seen widespread public anger against the government for its mishandling of the worst economic crisis.

The country is grappling with what is said to be its worst economic crisis since independence from the UK in 1948.

It is caused in part by a lack of foreign currency, which is used to pay for fuel imports.

People are languishing in long queues for fuel, cooking gas and endure power cuts lasting multiple hours.

The public came out onto the streets independently of political parties. The mass agitation prompted the government to impose a state of emergency which gives security forces sweeping powers to arrest people.

Later, a curfew was imposed to curb public protests which the public defied.