Sri Lanka is turning off streetlights to save electricity, a minister said today, as the country’s worst economic crisis in decades brought new power outages and a slump in its stock market, leading to a halt in trading due to falling prices.
The island nation of 22 million people is struggling with power outages lasting up to 13 hours a day as the government is unable to make payments for fuel imports due to a lack of foreign exchange.
“We have already instructed officials to turn off street lights across the country in order to save energy,” Energy Minister Pavitra Guanyaracci told reporters.
A diesel shipment from neighboring India is expected to arrive on Saturday as part of a $ 500 million credit line, the minister said, but warned that the situation was not expected to improve immediately.
“Once this is done we will be able to reduce the downtime but until it rains, probably sometime in May, the power outages will have to continue,” Guanyaracci told reporters. “There is nothing else we can do. ».
Water levels in reservoirs supplying hydropower plants have fallen to record lows, while demand has risen to record lows during the hot and dry season, she said.
The Colombo Stock Exchange (CSE) reduced the duration of daily trading to two hours, from the normal four and a half, due to power outages for the rest of the week at the request of stockbrokers, as stated in a statement.
However, the shares plunged after the start of today’s trading and the CSE suspended trading for 30 minutes – for the third time in two days – after the index including the largest companies fell more than 5%. The CSE suspended trading twice yesterday as concerns about the economy and power outages intensified.
The crisis is the result of tax cuts made at the wrong time and the impact of the coronavirus pandemic combined with historically weak public finances, which have resulted in a 70% drop in the country’s foreign exchange reserves over the past two years.
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