Sri Lanka economic crisis: Lankans selling gold to meet daily necessities
Sri Lankan currency is now the world’s poorest-performing currency, adding to the country’s greatest economic crisis since independence in 1948. The Sri Lankan rupee hit a new record low at 315 against USD officially on Saturday.
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FollowOwing to the severe ongoing economic crisis in Sri Lanka, people are forced to sell their gold ornaments, and jewellery to buy daily use items and to pay their rents, news agency ANI reported.
ANI visited Colombo’s largest and most famous Colombo Gold Centre to know the situation. Many gold owners said that the situation is very deplorable as people are selling their gold for daily use.
“We have never ever witnessed such kind of crisis in Sri Lanka. Sellers are more than buyers as Sri Lanka currency has plummeted to a historic low,” Silva a gold trader told ANI.
According to the report, Sri Lankan currency is now the world’s poorest-performing currency, adding to the country’s greatest economic crisis since independence in 1948. The Sri Lankan rupee hit a new record low at 315 against USD officially on Saturday.
The price of gold is fluctuating daily, at present the price of 24-carat gold is one lakh ninety thousand (1,95,000) in Sri Lankan rupee.
Mohsin a gold shop owner and maker shared with ANI the cause that forced Sri Lankans citizens to sell yellow metal in the city. “People are selling their gold primarily because they have to pay their own prices for daily use, loans and other important expenses,” he told ANI.
Currency depreciation is a major concern for Sri Lanka. In the first week of March, the price of USD in Sri Lanka rose by over 50 per cent, from Rs 203 to Rs 320, according to the Central Bank of Sri Lanka.
“Today the price of 24-carat gold is 205,000 (Sri Lankan rupee- LKR), when it’s converted to 22-carat it comes to LKR 185,000. In the present crisis, according to the USD rate, the gold pricing is day-by-day is going up. Last week it soared to LKR 210,000 then it came down to LKR 180,000 the day before yesterday, now it is LKR 15,000 more, around 195,000. the currency is so much that we expect to be LKR 200,000 in coming weeks,” said Silva.
He also said that the dollar crisis is behind such fluctuations in gold prices.
“We don’t have fixed-rate against USD. There is also a price difference of gold between the Sri Lankan government and private players,” said Silva.
Talking about soaring yellow metal prices he said that earlier, a year back the rise in prices fluctuated between LKR 100-200, but now it is in the range of LKR 10,000 due to the dollar crisis.
Meanwhile, some private money exchangers are charging as high as Sri Lanka Rupees 345-380 per USD.
“Banks are giving the international currency rate as a lower rate but the authorized private currency exchangers are asking for higher rates due to the ongoing crisis. The buy rate of USD is LKR 315 and the sell rate in the black market is around LKR 380,” Muhammad Ashwaq currency exchanged told ANI.
Meanwhile, Sri Lankan citizens continue to protest against the current government across the country and raised demands to sack the President and Prime Minister.
Sri Lanka is battling a severe economic crisis with food and fuel scarcity affecting a large number of the people in the island nation. The economy has been in a free-fall since the onset of the Covid-19 pandemic.
Sri Lanka is also facing a foreign exchange shortage, which has, incidentally, affected its capacity to import food and fuel, leading to the power cuts in the country. The shortage of essential goods forced Sri Lanka to seek assistance from friendly countries.
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