Sri Lanka president may drop brother as premier

COLOMBO • Sri Lankan President Gotabaya Rajapaksa is willing to drop his brother as prime minister, according to a top leader, as a fresh surge in inflation threatens to renew calls for the family to resign.

Mr Rajapaksa has agreed to form an all-party government with a new PM, local media reported on Friday, citing Mr Maithripala Sirisena, a former president who was part of the ruling coalition before his Sri Lanka Freedom Party quit in protest against the Rajapaksas' policies.

Mr Rajapaksa will discuss the matter with other parties, lawmaker Weerasumana Weerasingha said, without elaborating.

Politicians are preparing positions before Parliament resumes on May 4.

Opposition leaders have said they have enough support to oust the PM in a no-confidence vote, while street protesters want both Rajapaksas to step down.

Data on Friday showed costs in the capital Colombo rose 30 per cent, making more interest rate increases almost certain to meet conditions of an International Monetary Fund bailout.

President Rajapaksa extended an invitation to form an all-party government; he would agree to proposals if all political parties supported it, the President's Office said in a statement later on Friday.

Finance Minister Ali Sabry told the BBC that Sri Lanka will raise levies as the government had made a mistake when it almost halved the value-added tax rate to 8 per cent in 2019.

Sri Lanka needs US$4 billion (S$5.5 billion) over the next eight months to pay for imports.

PM Rajapaksa on Friday told The Island newspaper he was ready to accept any decision taken by President Rajapaksa about his post.

BLOOMBERG, THE ISLAND/ASIA NEWS NETWORK