Sri Lanka's Parliament to elect new president on July 20

Demonstrators remained in President Gotabaya Rajapaksa’s residence and office as well as Prime Minister Ranil Wickremesinghe's home

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Sri Lanka's Parliament will reconvene on July 15 and a new president will be elected on July 20, the parliamentary speaker said on Monday, as President Gotabaya Rajapaksa announced plans to resign on Wednesday amid a devastating economic crisis.

“Nominations for the next president will be presented to Parliament on July 19. On July 20, Parliament will vote to elect a new president,” Speaker Mahinda Yapa Abeywardena said in a statement.

“During the party leaders' meeting held today, it was agreed that this was essential to ensure a new all-party government is in place in accordance with the constitution and to take forward essential services.”

Sri Lanka's entire Cabinet is set to resign once an agreement is reached to form an all-party government, the prime minister's office said on Monday.

It comes as authorities try to overcome a political crisis triggered by an economic collapse.

“All the ministers who participated in the discussion were of the opinion that as soon as there is an agreement to form an all-party government, they are ready to hand over their responsibilities to that government,” said the office of Prime Minister Ranil Wickremesinghe, who has already offered to quit.

Sri Lankan President Gotabaya Rajapaksa had informed Mr Wickremesinghe that he will resign, the prime minister's office said earlier on Monday.

It follows tens of thousands of protesters storming the official residences of both men over Sri Lanka's economic crisis.

The capital Colombo was calm on Monday as hundreds of people strolled into the president's offices and residence, touring the colonial-era buildings. Police made no attempt to stop them.

“We are not going anywhere till this president leaves and we have a government that is acceptable to the people,” Jude Hansana, 31, told Reuters.

“The people's struggle is for wider political reforms. Not just for the president to leave. This is just the start.”

Sri Lanka’s opposition parties met on Sunday to agree on a new government.

Soldiers were stationed around the city, but troops looked on as crowds of people splashed in the pool of Mr Rajapaksa’s sprawling residence, lounged on beds and took selfies.

The chief of defence staff, Gen Shavendra Silva, called for public support to maintain law and order.

Occupants of the prime minister’s official residence cooked in an outdoor kitchen, played the tabletop game carom and slept on sofas.

Ranjith Madduma Bandara, a senior official in the main opposition United People’s Force, said separate discussions had been held with other parties and legislators who broke away from Mr Rajapaksa’s ruling coalition. More meetings were planned.

The political instability could hamper the country's negotiations with the International Monetary Fund for a bailout package, the central bank governor told Reuters in an interview.

P Nandalal Weerasinghe said he would stay on in the job, although he had said in May he might resign if there was no political stability in the island nation.

Asked if he would continue to steer the central bank, Mr Weerasinghe said: “I have the responsibility once I have been appointed to serve for [a] six-year term.”

Constitutional experts say once the president and prime minister formally resign, the next step would be for the speaker to be appointed as acting president and for parliament to vote for a new president within 30 days to complete Mr Rajapaksa's term that was to end in 2024.

'Total chaos'

Many Sri Lankans have blamed Mr Rajapaksa for the collapse of the tourism-dependent economy, which was hammered by the Covid-19 pandemic and a ban on chemical fertilisers that affected farm output. The ban was later reversed.

Government finances were paralysed by mounting debt and lavish tax breaks given by the Rajapaksa regime. Foreign exchange reserves were quickly depleted as oil prices rose.

The country barely has any dollars left to import fuel, which has been severely rationed, and long queues have formed in front of shops selling cooking gas. Headline inflation in the country of 22 million hit 54.6 per cent last month, and the central bank has said that it could rise to 70 per cent in the coming months.

The political crisis sent Sri Lanka's government bonds, already in default, to new lows. The country's 2025 bond fell as much as 2.25 cents on the dollar while most were now under 30 cents, or 70 per cent below their face value.

Lutz Roehmeyer of Capitulum Asset Management, which holds Sri Lanka's dollar bonds, said an IMF deal could happen this year or next, but for bondholders, a restructuring was likely only in 2024 or 2025, not next year.

“It's total chaos,” Mr Roehmeyer said. “Expectations are that the transition of power will be more chaotic and it will take longer to strike a deal.”

Updated: July 11, 2022, 2:40 PM