Sri Lanka defaults on debt for first time in its 70-year history
Skip to main content
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
  • Epaper
  • More
    • Subscribe
    • COVID-19
    • Bangladesh
    • Splash
    • Videos
    • Games
    • Long Read
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
The Business Standard

Tuesday
July 05, 2022

Sign In
Subscribe
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
  • Epaper
  • More
    • Subscribe
    • COVID-19
    • Bangladesh
    • Splash
    • Videos
    • Games
    • Long Read
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
TUESDAY, JULY 05, 2022
Sri Lanka defaults on debt for first time in its 70-year history

Sri Lanka Crisis

TBS Report
20 May, 2022, 09:00 am
Last modified: 20 May, 2022, 10:23 am

Related News

  • Sri Lanka's petrol stocks about to run dry, warns minister
  • Bankrupt Sri Lanka's inflation jumps beyond 50%
  • Sri Lanka eyes trimming presidential powers amid unrest over economic crisis
  • Sri Lanka makes progress towards IMF credit - IMF
  • 'Impossible situation' for Sri Lankans struggling for petrol

Sri Lanka defaults on debt for first time in its 70-year history

Sri Lanka's central bank governor said the country was now in a "pre-emptive default"

TBS Report
20 May, 2022, 09:00 am
Last modified: 20 May, 2022, 10:23 am
Sri Lanka's pro government supporters vandalise the camps of anti government protestors outside the president's office in Colombo, Sri Lanka, Monday, May 9, 2022. Government supporters on Monday attacked protesters who have been camped outside the office of Sri Lanka's prime minster, as trade unions began a "Week of Protests" demanding the government change and its president to step down over the country's worst economic crisis in memory. (AP Photo/Eranga Jayawardena)
Sri Lanka's pro government supporters vandalise the camps of anti government protestors outside the president's office in Colombo, Sri Lanka, Monday, May 9, 2022. Government supporters on Monday attacked protesters who have been camped outside the office of Sri Lanka's prime minster, as trade unions began a "Week of Protests" demanding the government change and its president to step down over the country's worst economic crisis in memory. (AP Photo/Eranga Jayawardena)

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.

It comes after a 30-day grace period to come up with $78 million of unpaid debt interest payments expired on Wednesday (18 May), reports the BBC.

Sri Lankan Central Bank Governor P Nandalal Weerasinghe 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.

"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," P Nandalal Weerasinghe said. 

Sri Lanka is seeking to restructure debts of more than $50 billion 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.

An economic crisis unprecedented in the country's history since independence in 1948 has led to a critical shortage of foreign exchange, that saw it miss two coupon payments on sovereign bonds on 18 April.

Sri Lanka has already said it is unable to make the coupon payments, and a 30-day grace period ends on Wednesday. Sri Lanka currently has no dollars to pay for petrol shipments, Power and Energy Minister Kanchana Wijesekera told parliament.

A petrol shipment has been at Colombo port since 28 March but the government has been unable pay, he added.

Sri Lankan Prime Minister Ranil Wickremesinghe said on Wednesday the country had secured $160 million in bridge financing from the World Bank, but it was not clear if the funds could be used for fuel payments.

"The statistics have gone haywire," he said. "But the reality is we don't even have $1 million." 

Massive protest outside Sri Lankan president's office as crisis worsens

Hit hard by the pandemic, rising oil prices and populist tax cuts, Sri Lanka's dire economic situation has led to spiralling inflation and shortages of essential supplies, bringing thousands of onto the streets in protest.

Violence between pro- and anti-government factions and police left nine dead and more than 300 injured last week, and was followed by the resignation of former prime minister Mahinda Rajapaksa.

Top News / World+Biz / South Asia / Global Economy

Sri Lanka

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Padma Bridge opens up investment spree in south
    Padma Bridge opens up investment spree in south
  • BB slaps 100% LC margin to discourage imports of cars, electronics among other items 
    BB slaps 100% LC margin to discourage imports of cars, electronics among other items 
  • Several law enforcement departments monitor the scene of a mass shooting at a Fourth of July parade route in the wealthy Chicago suburb of Highland Park, Illinois, US July 4, 2022. REUTERS/Max Herman
    Suspect captured in shooting at 4 July parade in Chicago's Highland Park suburb

MOST VIEWED

  • A man waits in a queue to buy petrol due to fuel shortage, amid the country's economic crisis, in Colombo, Sri Lanka on 16 June 2022. File Photo: Reuters
    Sri Lanka's petrol stocks about to run dry, warns minister
  • People are given packets of biscuits from a free distributor, while waiting in line to buy kerosene near a Ceylon Petroleum Corporation fuel station, amid the country's economic crisis in Colombo, Sri Lanka, April 7, 2022. Reuters.
    Bankrupt Sri Lanka's inflation jumps beyond 50%
  • People shout slogans against Sri Lanka's President Gotabaya Rajapaksa and demand that Rajapaksa family politicians step down, during a protest amid the country's economic crisis, at Independence Square in Colombo, Sri Lanka.(REUTERS)
    Sri Lanka eyes trimming presidential powers amid unrest over economic crisis
  • Photo: Collected
    Sri Lanka crisis gives India chance to gain sway vs China
  • People wait in a queue after receiving tokens to buy petrol due to fuel shortage, amid the country's economic crisis, in Colombo, Sri Lanka, June 27, 2022. REUTERS/Dinuka Liyanawatte
    Sri Lanka makes progress towards IMF credit - IMF
  • Demonstrators who blocked a main road with their vehicle to demand fuel near President Gotabaya Rajapaksa's residence, argue with a police officer, during the country's economic crisis, in Colombo, Sri Lanka, June 29, 2022. REUTERS/Dinuka Liyanawatte
    Doctors, bankers protest 'impossible situation' as Sri Lanka runs out of fuel

Related News

  • Sri Lanka's petrol stocks about to run dry, warns minister
  • Bankrupt Sri Lanka's inflation jumps beyond 50%
  • Sri Lanka eyes trimming presidential powers amid unrest over economic crisis
  • Sri Lanka makes progress towards IMF credit - IMF
  • 'Impossible situation' for Sri Lankans struggling for petrol

Features

Last month Swapan Kumar Biswas, the acting principal of Mirzapur United College, was forced to wear a garland of shoes for ‘hurting religious sentiments.’ Photo: Collected

Where do teachers rank in our society?

22h | Panorama
Japanese Ambassador Naoki Ito. Sketch: TBS

'The game-changing projects are in line with the Bay of Bengal Industrial Growth Belt initiative'

1d | Panorama
A Glittery Eid

A Glittery Eid

1d | Mode
Rise’s target customers are people who crave to express themselves through what they wear, and their clothing line is not relegated to any age range.

Level up your Eid game with Rise

1d | Mode

More Videos from TBS

Realme Narzo 50A Prime available now

Realme Narzo 50A Prime available now

12h | Videos
Export products to get diversified

Export products to get diversified

13h | Videos
Horrible routes of human trafficking

Horrible routes of human trafficking

14h | Videos
Why Mbappe cheated Real Madrid

Why Mbappe cheated Real Madrid

15h | Videos

Most Read

1
TBS Illustration
Education

Universities may launch online classes again after Eid

2
Meet the man behind 'Azke amar mon balo nei'
Splash

Meet the man behind 'Azke amar mon balo nei'

3
Padma Bridge from satellite. Photo: Screengrab
Bangladesh

Padma Bridge from satellite 

4
World Bank to give Bangladesh $18b IDA loans in next five years
Economy

World Bank to give Bangladesh $18b IDA loans in next five years

5
Illustration: TBS
Interviews

‘No Bangladeshi company has the business model for exporting agricultural product’

6
Lee Hyun-seung (third from right), head of Korea Expressway Corp.'s Overseas Project Division, shakes hands with Quazi Muhammad Ferdous, head of the Bridge Authority of Bangladesh, after signing a contract on June 29 (local time).
Bangladesh

Korean company to oversee N8 Expressway in Bangladesh

EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2022
The Business Standard All rights reserved
Technical Partner: RSI Lab
BENEATH THE SURFACE
Workers ready a passenger vessel with a fresh coat of paint to the deck ahead of the Eid-ul-Azha at a dockyard at Mirerbagh in South Keraniganj. The vessel getting the makeover plies the Bhandaria route and will take holidaying people from the city to their country homes. Eid will be celebrated on 10 June this year. The photo was taken on Monday. Photo: Mumit M

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net