The decision comes days after a failed no-confidence motion attempt against the prime minister and the defection of several ministers forced a cabinet reshuffle.
Over 300 people have been arrested in connection with the riots in the central district of Kandy in the first state of emergency imposed in Sri Lanka since the end of a decades-long Tamil separatist war in 2009.
Sri Lanka's Kandy district had been rocked by communal clashes since Sunday, following attacks on members of the minority Muslim community by nationalist crowds from the Sinhalese majority. At least two people were killed.
Buddhist mobs sweep through Muslim neighbourhoods in the country's central hills, destroying stores and setting homes on fire despite a curfew and a state of emergency.
President Maithripala Sirisena made the decision amid fears that anti-Muslim attacks in a central Sri Lankan hill town could spread.
Police had been placed on alert in the central hill station town following unrest that saw a man killed and Muslim businesses set alight.
The party of former Sri Lankan president Mahinda Rajapakse is on track for a shock landslide victory amid disarray in the ranks of President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe's ruling alliance.
A blanket ban on the import, manufacture or sale of disposable plastic products and shopping bags, after a garbage dump collapse killed 32.
Over 76,000 people have been infected by the mosquito-borne disesase in the first six months of this year, a record figure that far surpasses last year's total of 55,000.
The garbage dump came crashing down on neighbouring homes after catching fire, burying at least 145 houses late on Friday.
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