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Sri Lanka's new president Dissanayake promises change

Millions had voted for the opposition parliamentarian, putting faith in his graft-fighting pledge and vow to bolster a fragile economic recovery

Sri Lanka's leftist leader Anura Kumara Dissanayake took office as president on Monday, promising change in the island nation long led by powerful political families which is emerging from its worst economic crisis in more than seven decades.

Millions of Sri Lankans had voted for the opposition parliamentarian, putting faith in his graft-fighting pledge and vow to bolster a fragile economic recovery.

"I pledge ... to demonstrate dedication to protecting and upholding democracy," Dissanayake, 55, said in inauguration remarks at the president's office, saying he was taking office at a challenging time.

"Our politics needs to be cleaner, and the people have called for a different political culture," he added. "I am ready to commit to that change."

Outside, dozens of supporters held up posters carrying his image, with some waving the Sri Lankan flag and chanting "AKD", the initials of the new president, who displaces the incumbent, veteran politician Ranil Wickremesinghe.

"I’m very happy," said one of them, beautician Iroma Nilanthi Liyanage, adding that Dissanayake inspired supporters with hope. "We worked very hard for this victory. For the first time the poor people have someone who stands for them."

Tasks he now faces include setting up a new cabinet and wooing parliament, where his party has just three of 225 seats, to pass a budget under the terms of a $2.9-billion bailout from the International Monetary Fund (IMF).

Before Monday's swearing-in, Prime Minister Dinesh Gunawardena resigned to make way for the new prime minister and his cabinet.

Gunawardena, 75, took over as prime minister in July 2022 after former president Gotabaya Rajapaksa fled the Indian Ocean nation and resigned amid protests unleashed by the crisis, which caused shortages of essential items and a debt default.

Dissanayake was declared the new president late on Sunday, displacing Wickremesinghe, who had been appointed by parliament to serve out Rajapaksa's remaining term.

Sri Lanka's sovereign dollar bonds shed 2.88 to 3.28 cents on the dollar in early trade on Monday to bid between 49.14 and 49.77 cents.

Investors worry that Marxist-leaning Dissanayake's desire to revisit the terms of the country's IMF bailout could delay future disbursements, and that he could seek to renegotiate a debt deal with bondholders finalised last week.

Sri Lanka's close neighbours India, Pakistan, and the Maldives also congratulated Dissanayake on his win, along with China, the largest bilateral creditor.