(Bloomberg) -- Sri Lanka's securities commission ordered the Colombo Stock Exchange to be halted next week to give investors time to digest the country's economic conditions.
The board of directors of the stock exchange, along with other stakeholders, had sought a temporary closure of the market, the Securities and Exchange Commission of Sri Lanka said in a statement on Saturday.
“The SEC has carefully considered the grounds that have been adduced by them and has evaluated the impact the present situation in the country could have on the stock market, in particular the ability to conduct an orderly and fair market for trading in securities,” it said.
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A Sri Lankan delegation is headed to Washington, looking to secure up to $4 billion from the International Monetary Fund and other lenders to help the island nation pay for food and fuel imports and limit debt defaults. The country is in political turmoil, with street protests by citizens calling for the ouster of President Gotabaya Rajapaksa. The $81 billion economy faced $8.6 billion worth of debt obligations this year before it suspended payments on foreign loans to preserve cash to pay for essential food and fuel imports.
“It would be in the best interests of investors as well as other market participants if they are afforded an opportunity to have more clarity and understanding of the economic conditions presently prevalent, in order for them to make informed investment decisions,” the SEC said.
The Ceylon Chamber of Commerce wrote to the regulator, expressing “dismay” at the decision and seeking a reversal.
Since there are circuitbreakers in place, there was no need to halt trading and the action will be seen “by market participants as akin to the unsuccessful attempt made to hold the exchange rate constant against market forces,” the industry body's Chairman Vish Govindasamy wrote in the letter.
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