February 21, 2018 / 4:58 PM / a month ago

Sri Lankan coalition to continue in government after local election rout

COLOMBO (Reuters) - Sri Lanka’s two ruling parties said on Wednesday they would continue their national unity government, easing the political uncertainty created by their poor showing in local council elections this month.

Sri Lankan Prime Minister Ranil Wickremesinghe looks on during a news conference in Colombo, Sri Lanka February 16, 2018. REUTERS/Dinuka Liyanawatte

Prime Minister Ranil Wickremesinghe’s centre-right United National Party (UNP) and President Maithripala Sirisena’s centre-left Sri Lanka Freedom Party (SLFP) were routed by a party backed by former President Mahinda Rajapaksa, plunging the government into crisis.

Rajapaksa, who crushed the Tamil Tiger rebels in a 26-year civil war before he was ousted in 2015, called for the parliament to be dissolved and a snap election to be held.

Since the Feb 10. vote, Sirisena has been in talks with Wickremesinghe’s party as well as opponents led by Rajapaksa on forming a new government.

But on Wednesday the coalition parties confirmed they would stick together.

Sri Lankan Prime Minister Ranil Wickremesinghe leaves after a news conference in Colombo, Sri Lanka February 16, 2018. REUTERS/Dinuka Liyanawatte

“We are working on the motion passed in parliament and we have not rescinded it. And I don’t think there is a need to cancel that,” Wickremesinghe told parliament, referring to the motion passed by the two parties in September 2015 to form the national government.

The secretary of Sirisena’s party, Fisheries Minister Mahinda Amaraweera, also said the agreement between the two parties to work together still stood and had not been withdrawn.

Analysts said the remarks from the parties eased the negative sentiment over a possible change of government.

The political uncertainty hurt the rupee, which hit a record low on Feb. 14 and the stock market.

However, both have recovered since the parties have been in discussions to continue the coalition government with a cabinet reshuffle.

The central bank chief last week said the political uncertainty could weigh on Sri Lankan economic growth this year.

Reporting by Ranga Sirilal and Shihar Aneez; Editing by Alison Williams

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