Hours after protestors clashed with police outside Sri Lankan President Gotabaya Rajapaksa's residence in Colombo, the island leader declared a state of emergency granting him sweeping powers to suspend laws, detain people and seize property.
Later on, a curfew was announced for Saturday till Monday.
The extraordinary measures come amid what has been dubbed Asia's fastest growing inflation rate which has galloped to almost 18%, the highest in the region, reports Bloomberg.
Alongside the high inflation, there have also been severe food shortages. Coupled with a lack of fuel, spiralling prices of essentials, 13-hour power cuts and a rapidly depleting foreign reserve – down to only $2.31 billion – the public anger is palpable.
The country's foreign exchange reserves have plummeted by almost 70% in two years, making it hard to purchase even the most basic of necessities. Last month, the island nation cancelled school exams for around 4.5 million students after running out of printing paper.
The current demands from protestors are for the Rajapaksas to resign. Rajapaksa's elder brother Mahinda serves as prime minister while Basil, the youngest, holds the finance portfolio. The eldest Rajapaksa brother Chamal controls the agriculture ministry while nephew Namal is the sports minister.
Many believe the president has been too slow to act.
Sri Lanka's trade deficit doubled to $1.1 billion in December and the country faces a $1 billion dollar bond repayment in July.
The Rajapaksa administration in recent weeks has devalued the rupee, raised interest rates, placed curbs on non-essential imports, and reduced stock-trading hours to preserve electricity and foreign currency.
It is also preparing to seek a bailout from the International Monetary Fund (IMF). The Russian invasion of Ukraine and the subsequent soaring prices of oil may have forced Rajapaksa's hand.
While the IMF loan may take some time, in the interim Rajapaksa has also sought help from China and India. A diesel shipment under a $500 million credit line signed with India in February is expected to arrive on Saturday.
A consignment of 40,000 MT of diesel was handed over under the Indian $500m Line of Credit on Saturday.
Sri Lanka and India have also signed a $1 billion credit line for importing essentials, including food and medicine, and the Rajapaksa government has sought at least another $1 billion from New Delhi.
China is also considering offering the island nation a $1.5 billion credit facility and a separate loan of up to $1 billion, The Indian Express reports.
The IMF last month said Sri Lanka faces a "clear solvency problem" due to unsustainable debt levels, as well as persistent fiscal and balance-of-payments shortages.
Experts say Sri Lanka's crisis is a result of economic mismanagement by successive governments that created a "twin deficit" as the country's national expenditure exceeds its national income, and that its production of tradable goods and services is inadequate.
The current crisis was accelerated by tax cuts Rajapaksa promised during the 2019 election campaign and those came into play months before the Covid-19 pandemic which hurt large parts of Sri Lanka's economy, mainly the tourism industry and foreign workers' remittances.
Credit ratings agencies moved to downgrade Sri Lanka and effectively locked it out of international capital markets which could have supported the country's debt management programme.
The island nation's neighbours are also on alert at the moment. Sixteen Sri Lankan Tamils arrived in India in two batches on March 22. Unlike previous migration by Sri Lanka Tamils, who had fled war and atrocities, the latest entrants were economic refugees.
According to The Indian Express, Indian intelligence believes that unemployment and skyrocketing inflation in the nation will drive away more people from the island in the coming days and the number of refugees may rise.