- The onset of COVID-19 marked the beginning of financial difficulties in Sri Lanka.
- Many anticipating the crisis turned to cryptocurrencies that are not yet regulated in the country.
- Sri Lanka’s economy has been in free fall for some time and is on the verge of bankruptcy.
The pandemic was the beginning of a problem for the Sri Lankan economy. Many who expected the crisis began to look for ways to survive. Some people in Sri Lanka have relied on cryptocurrencies that do not yet have any kind of governance structure. In contrast, its neighbor, India, is slowly moving forward to regulate its wealth.
It has only recently been announced that crypto assets will be subject to a 1% transferable securities tax. Also, two days ago, the government gave a comprehensive explanation in response to concerns from companies.
If the TDS policy is due to take effect on July 1, will it be a normal business for crypto exchanges and dealers in the domestic market?
Like the share of crypto companies, the share of mortgage companies has been declining for quite some time. Most of them have been a tailwind after the repo rate was raised by the Reserve Bank of India (RBI) on May 4.
Economists believe that healthy demand for real estate may mitigate the impact of interest rate hikes, but there are business segments that may be vulnerable to rising interest rates.
Meanwhile, in Sri Lanka, the economy has been declining freely for some time, accelerating towards bankruptcy at an alarming rate. Food inflation has skyrocketed to 57% and the country has no stockpile to import its necessities due to its depletion of stockpiles.
Two of Sri Lanka’s most important economic pillars, the garment and tea sectors, are both suffering from a serious setback as a direct result of the current economic crisis.