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Sri Lanka Falls Into Default For The First Time Ever
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| Contributor | Bojicat |
| Last Edited | Bojicat May 19, 2022 03:17pm |
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| Category | News |
| Author | Bloomberg |
| News Date | Thursday, May 19, 2022 09:00:00 PM UTC0:0 |
| Description | Sri Lanka fell into default for the first time in its history as the government struggles to halt an economic meltdown that prompted mass protests and a political crisis.
Policy makers had flagged to creditors that the nation wouldn’t be able to make payments until the debt is restructured, and is therefore in pre-emptive default, central bank Governor Nandalal Weerasinghe said at a briefing Thursday. The coupon payments, originally due April 18, were worth $78 million combined on notes maturing 2023 and 2028, with a 30-day grace period that expired on Wednesday.
Sri Lanka Missed $78M Bond Coupon, $105M China Payment April 18.
Sri Lanka has been mired in turmoil amid surging inflation -- which Weerasinghe sees accelerating to 40% in coming months -- a plummeting currency and an economic crisis that has left the country short of the hard currency it needs to import food and fuel. Public anger has boiled over into violent protests and led the government to announce last month it would halt payments on its $12.6 billion pile of foreign debt to preserve cash for essential goods.
That marks the nation’s first sovereign debt default since it gained independence from Britain in 1948. Its bonds are among the worst performers in the world this year and trade deep in distressed territory, with holders bracing for losses approaching 60 cents on the dollar. |
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