The Central Bank of Sri Lanka said its benchmark lending rate was raised to 14.5% to “stabilise the exchange rate” after the rupee depreciated over 35% in a month.

The deposit rate was also increased by seven percentage points to 13.5% amid reports that Sri Lanka’s rupee was the world’s worst performer, overtaking the Russian ruble.

The central bank said the shock-treatment rate hike was due to its belief that the embattled island’s inflation, which is already at record high levels, could get worse.

The Colombo Consumer Price Index rose 18.7% in March while food inflation was at over 25%, with private analysts placing inflation at over 50% in March.

International rating agencies have downgraded Sri Lanka as fears grew that it could default on its US$51 billion external debt as foreign reserves fell below US$2 billion at the end of March.

As economic hardships brought on by shortages of food, fuel and electricity led to widespread anti-government protests across the country, there were also calls for president Gotabaya Rajapaksa to resign.

The government has announced it will seek an IMF bailout, but talks are yet to begin.