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Sri Lanka Needs a Currency Board

The time has come for Sri Lanka to face its financial demons head-on. It will be a difficult fight, but a currency board – which strips the government and the central bank of the opportunity to mismanage the budget and the exchange rate – vastly improves its chances of winning.

COLOMBO – The war in Ukraine has generated an economic tidal wave, which is crashing over countries near and far. Among the more far-flung is Sri Lanka, half a world away from the battlefield, where surging food and fuel prices have supercharged a downward spiral that was already underway. Now, the island is being rocked by street protests, and every member of the cabinet – except Prime Minister Mahinda Rajapaksa, the brother of President Gotabaya Rajapaksa – has resigned. To save Sri Lanka from economic collapse and sociopolitical disaster will require radical action.