Farmane-Ilahi

(Reuters) - Sri Lanka's new leftist leader Anura Kumara Dissanayake was sworn in as president on Monday.

Promising change as the island nation emerges from its worst economic crisis in more than seven decades.

"We have a deep understanding that we have got a challenging country, our politics must be cleaner than this, there is a need for a political culture that people expect. We will commit ourselves to that. The public have a very negative view of politicians and politics."

Long led by powerful political families, millions of Sri Lankans voted for the Marxist-leaning parliamentarian.

"Our main expectation is for the cost of living to reduce and the economic situation of the poor people to improve."

Dissanayake's first tasks will be setting up a new cabinet and wooing parliament where his party has just three of 225 seats.

And hoping to pass a budget under the terms of a $2.9-billion bailout from the International Monetary Fund (IMF).

The country's economy buckled in 2022 under a severe foreign exchange shortage.

That left it unable to pay for imports of essentials including fuel, medicine and cooking gas.

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

Gunawardena, took over as prime minister in July 2022 after former president Gotabaya Rajapaksa fled and resigned amid protests unleashed by the crisis.

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 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 finalized last week.

Constitutonal lawyer Bhavani Fonseka told Reuters with Sri Lanka's economic reliance on international assistance she doest expect the new president to act rashly.

"He will be taking a very pragmatic approach, at least for the next couple of months. How things play out in 2025 and beyond is to be seen. But I think at the most immediate he is going to take a very practical approach.”