May 20, 2022
1 min read

Lanka defaults on debt for first time

It comes after a 30-day grace period to come up with $78m of unpaid debt interest payments expired on Wednesday….reports Asian Lite News

Sri Lanka has defaulted on its debt for the first time in its history as the country struggles with its worst financial crisis in more than 70 years, BBC reported.

It comes after a 30-day grace period to come up with $78m of unpaid debt interest payments expired on Wednesday.

The governor of the South Asian nation’s central bank said the country was now in a “pre-emptive default”.

Later on Thursday, two of the world’s biggest credit rating agencies also said Sri Lanka had defaulted.

Defaults happen when governments are unable to meet some or all of their debt payments to creditors, BBC reported.

It can damage a country’s reputation with investors, making it harder to borrow the money it needs on international markets, which can further harm confidence in its currency and economy.

Asked on Thursday whether the country was now in default, central bank governor P. Nandalal Weerasinghe said: “Our position is very clear, we said that until they come to the restructure (of our debts), we will not be able to pay. So that’s what you call pre-emptive default.

“There can be technical definitions… from their side they can consider it a default. Our position is very clear, until there is a debt restructure, we cannot repay,” he added.

Sri Lanka is seeking to restructure debts of more than $50bn it owes to foreign creditors to make it more manageable to repay.

The country’s economy has been hit hard by the pandemic, rising energy prices, and populist tax cuts. A chronic shortage of foreign currency and soaring inflation had led to a severe shortage of medicines, fuel and other essentials.

In recent weeks, there have been large, sometimes violent, protests against President Gotabaya Rajapaksa and his family due to the growing crisis, BBC reported.

ALSO READ: Lanka seeks India’s assistance to garner global economic support

Previous Story

Narrow escape for 40 boat passengers in Patna

Next Story

MBZ orders provision of Dh35 million aid to Somalia

Latest from -Top News

Pakistani Handles Banned Again in India

The move comes in continuation of India’s escalating digital and diplomatic restrictions against Pakistan…reports Asian Lite News All Pakistani accounts on X have once again been blocked in India, after briefly becoming

Ghana Welcomes PM Modi

Hundreds of people, including locals, started chanting “Modi-Modi”, “Bharat Mata Ki Jai” and “Vande Mataram” as soon as PM Modi arrived at the hotel….reports Asian Lite News Prime Minister Narendra Modi received

Musk Signals Thaw in Trump Rift

Musk credited Trump for resolving major global conflicts, tagging a Truth Social post to back his claim….reports Asian Lite News Tesla CEO and former presidential advisor Elon Musk appeared to signal a

Tibetans Slam China’s ‘Reincarnation Politics’

Sikyong said the Chinese government is systematically working to erase Tibetan identity by targeting its language and religion, core pillars of its cultural heritage….reports Asian Lite News With the Dalai Lama entrusting
Go toTop

Don't Miss

Fresh ISIS Probe in Sri Lanka After Ahmedabad Arrests

Reports say Pakistani handlers tasked the suspects with terror attacks

IAF chief calls on President Wickremesinghe in Colombo

The bilateral talks between the leaders assured IAF’s steadfast commitment