Sri Lanka announces default on external debt

Nandalal Weerasinghe, newly appointed Governor of the Central Bank of Sri Lanka

© APA | Nandalal Weerasinghe, newly appointed Governor of the Central Bank of Sri Lanka

# 12 April 2022 12:03 (UTC +04:00)

Sri Lankan authorities on Tuesday announced that the nation would default on its $51 billion external debt pending a bailout from the International Monetary Fund, APA reports citing Sputnik.

Previously, Central Bank Governor P. Nandalal Weerasinghe said that the country will temporarily suspend foreign debt payments to avoid a hard default, as reserves are required for essential imports.

"It has come to a point that making debt payments are challenging and impossible. The best action that can be taken is to restructure debt and avoid a hard default", he said.

The governor also expressed hope to reach consensus with the creditors, noting that development bonds will be held separately and will not be restructured.

Note that Sri Lanka has been sufferring from the worst economic crisis since the nation proclaimed independence in 1948, with shortages of food and fuel causing mass protests. Last week, authorities also declared a state of public health emergency due to a severe shortage of medicines and equipment. The current crisis was triggered, among other things, by a low flow of tourists amid the pandemic. As a result of fuel shortages, prolonged power cuts in some parts of the country are lasting up to 13 hours.

#
#

THE OPERATION IS BEING PERFORMED