Sri Lanka says small nations face chaos from financial and natural turmoil
ECONOMYNEXT – Small nations are facing economic chaos from financial turmoil on top of natural disasters Sri Lanka’s finance minister Mangala Samaraweera had told a Commonwealth forum.
"Vulnerability must be looked at not only from a trade and commerce point of view but must take into account financial risk as well," Samaraweera had told a Commonwealth Forum.
"In an era where currencies and interest rates are volatile, mainly due to the unpredictability of external factors such as …the consequential effects of spiraling energy costs, natural disasters may push smaller nations towards uncontrollable economic chaos.
"Sri Lanka welcomes these series of initiatives of the Commonwealth that aims to enhance national capacities to reduce disaster risk."
Sri Lanka has a soft-pegged currency where two anchors are targeted, leading to frequent balance of payments trouble whenever credit growth picks up.
In 2018 Sri Lanka has faced two runs on the rupee, amid liquidity spikes and inconsistent policy, analysts have said. (Colombo/Oct11/2018)