Colombo Stock Exchange to continue to be shut for 5 days as Sri Lanka struggles to fight foreign exchange crisis

With Sri Lanka on the brink of financial ruin and saddled with dwindling overseas reserves and $25 billion in overseas debt, the CSE will stay briefly closed for a week from April 18.

(REUTERS)

The Colombo Stock Exchange will stay quickly closed for a week from Monday to supply buyers an possibility to have “more readability and understanding” of the contemporary financial stipulations in crisis-hit Sri Lanka that would help them “to make knowledgeable funding decisions,” it used to be introduced on Saturday.

“The inventory market will continue to be quickly closed for a duration of 5 commercial enterprise days from April 18, 2022,” the Securities and Exchange Commission of Sri Lanka (SEC) stated in a press release.

Sri Lanka is dealing with its worst financial disaster seeing that gaining independence from the UK in 1948. The financial disaster additionally caused a political turmoil in the island state with residents keeping nationwide road protests for weeks over prolonged electricity cuts and scarcity of fuel, meals and different day by day necessities and traumatic ouster of President Gotabaya Rajapaksa.

The Board of Directors of the Colombo Stock Exchange (CSE) in a verbal exchange on Friday referred to as upon the SEC to briefly shut the inventory market citing the current scenario in the country, the launch said.

Many different stakeholders of the securities market, along with the Colombo Stock Brokers Association, have additionally sought the brief closure of the market on the equal grounds.

The SEC stated it cautiously regarded the grounds that have been adduced by means of them and has evaluated the have an effect on the existing scenario in the us of a may want to have on the inventory market, in precise the potential to behavior an orderly and honest market for buying and selling in securities.

“The SEC is of the view that it would be in the pleasant pursuits of buyers as nicely as different market individuals if they are afforded an possibility to have extra readability and perception of the monetary stipulations in modern times prevalent, in order for them to make knowledgeable funding decisions,” the launch said.

Therefore, performing in phrases of the applicable provisions, the SEC determined to direct the CSE to briefly shut the inventory market for a duration of 5 commercial enterprise days moving forward from April 18, it said.

Sri Lanka is on the brink of bankruptcy, saddled with dwindling overseas reserves and USD 25 billion in overseas debt due for compensation over the subsequent 5 years. Nearly USD 7 billion is due this 12 months only.

The authorities introduced Tuesday that it is suspending repayments of overseas debt, inclusive of bonds and government-to-government borrowing, pending the completion of a mortgage restructuring programme with the International Monetary Fund (IMF).

President Rajapaksa has defended his government’s actions, announcing the overseas trade disaster was once now not his making and the financial downturn was once mostly pandemic pushed through the island nation’s tourism income and inward remittances waning.

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