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Colombo: The Sri Lankan government on Thursday announced a new plan to arrest a sharp rise in food prices as the country grapples with rising inflation and depleting foreign reserves.

Sri Lanka’s inflation plunged to a record 11.1 per cent in November, mainly because its tourism-dependent economy has been devastated by international COVID-19 travel restrictions. The country’s foreign reserves stand at just $1.58 billion, down from $7.5 billion when President Gotabaya Rajapaksa took office in 2019.

To boost its currency reserves, the government earlier this week imposed import restrictions and hiked fuel prices, leading to shortages of essential commodities and skyrocketing prices.

In the past year, the prices of many food items and medicines have increased by about 20 percent, with some rising even more.

“We are adopting a new scheme to prevent consumers from paying black market price for goods in demand,” Trade Minister Bandula Gunawardhan told reporters on Thursday.

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The government has banned imports and hiked fuel prices, leading to a shortage of essential commodities.

“The government has imported rice to meet the shortfall and it is now being sold at Rs 140 ($0.70) per kg in all stores, while the market price is pf Rs 240 per kg. Traders should cooperate with the government to remove the problems of the common man.

However, retailers say they have no option but to raise their prices, as the rise in fuel costs has disrupted the supply chain. Vegetable vendors in Colombo complain that 75 per cent of the produce has not reached the capital’s markets, as deliveries from nearby villages have come to a standstill.

Afras Shahulhameed, a salesman at GACA Pharmacy in Colombo, told Arab News that the store could do nothing to stop the rise in prices.

“We are helpless, as the revised price list has come from the respective suppliers,” he said. Shahulhameed cited as an example an increase in the price of a packet of Valsartan, a popular drug used to treat high blood pressure, from Rs 2,000 to Rs 2,500 earlier this year.

Gamini Leslie Peiris, a three-wheel taxi driver in Colombo, told Arab News that this week alone the minimum travel price has increased by 50 percent. “The log-in fare for taxi meters has increased from $1 to $1.5 after the fuel increase,” he said.

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