Sri Lanka has declared a state of emergency over food shortages as private banks are unable to finance imports.
President Gotabaya Rajapaksa announced that he had ordered the emergency regulations on Tuesday in hopes of countering the hoarding of sugar, rice and other essential foods.
The regulations allow authorities to seize food stocks held by traders, or arrest people who hoard essential foods.
It also allows the government to fix controlled prices for the public.
Trade Minister Bandula Gunawardena confirmed this problem as well saying that traders were in fact hoarding stocks, resulting in food shortages.
The President has appointed a Commissioner General of Essential Services to coordinate the supply of consumer goods, such as paddy, rice, sugar, etc.
Sri Lanka has been badly hit by a coronavirus wave that is claiming more than 200 lives a day.
Official figures show that the country has recorded 8,991 COVID-related deaths since the start of the pandemic.
The pandemic has caused the economy to shrink by a record 3.6%. Last year, the government banned the import of vehicles and other items, including edible oil and spices, in hopes to save foreign exchange.
Importers still say they have been unable to source dollars to pay for the food and medicines they are allowed to buy.
The Central Bank of Sri Lanka increased interest rates in a bid to shore up the local currency two weeks ago.
Sri Lanka’s foreign reserves fell to $2.8bn at the end of July, from $7.5bn in November 2019. Bank data shows that the rupee has lost more than 20 per cent of its value against the US dollar in that time.
Officials have warned that the government may introduce fuel rationing unless fuel consumption was reduced.
