Sri Lanka’s currency has tumbled to a record low, making it the world’s worst-performing currency, behind even Russia’s ruble, as President Gotabaya Rajapaksa struggles to contain the worsening economic and political crisis.

The Sri Lankan rupee traded around 300 against the dollar on Wednesday, down 32% so far this year after Rajapaksa ended emergency rules just days after they were imposed following mass resignations of politicians.

Sri Lanka is facing a foreign exchange crisis as its government grapples with looming debt payments, widespread protests and an economic emergency.This Opposition to emergency decrees Ali Sabri, the new finance minister in Rajapaksa’s government, resigned less than 24 hours after taking office.

Sabri’s resignation is the latest in Sri Lanka’s hasty departure.The country’s entire cabinet resigned over the weekend after nationwide protests Severe food and power shortages and runaway inflation. Central bank governor Ajith Nivard Cabraal, who was due to oversee a policy meeting on Thursday, also resigned on Monday.

Hollowing out of Rajapaksa government raises concerns about country’s capabilities Get help from the International Monetary Fund To avoid default on looming international bond payments.brother of former treasury secretary and president Basil Rajapaksa He had been preparing to fly to Washington to discuss terms with the International Monetary Fund before resigning over the weekend.

“It’s not looking good. A lot depends on whether they can get any IMF funding,” said Steve Cochran, chief Asia-Pacific economist at Moody’s. “A stable government is important.”

Cochrane said higher interest rates could help curb inflation and could boost the rupee. “But there are other factors driving inflation that the central bank has little control over,” he added, including Commodity prices push up Suffered by Russia’s invasion of Ukraine, supply chain constraints and a lack of foreign exchange reserves to pay for imports.

Analysts said the market focused on the repayment of a $1 billion sovereign dollar bond due on July 25. The bond traded well below par on Wednesday, hitting an all-time low of $0.58, amid doubts that Sri Lanka would be able to provide sufficient dollar funding. Payment.

As finance minister, the president’s brother oversees a regime big tax cut This has prompted global rating agencies to repeatedly downgrade the country’s sovereign credit rating, keeping it out of international debt markets.

That has forced Sri Lanka to pay interest on its sovereign bonds from dwindling foreign reserves, which have come under pressure during the coronavirus pandemic.Tourism, one of the main sources of income for the island nation, has been hit especially hard.

The International Monetary Fund estimated in late February that Sri Lanka had only about a month’s worth of foreign exchange reserves left.

“With the government in disarray, the prospect of getting the IMF package looks bleak,” said Alex Holmes, Asia economist at Capital Economics. “This adds to the fact that the government will eventually have to resort to sovereign default. possibility”.