Sri Lanka Defaults on Debt for the First Time Ever

Sri Lanka has defaulted on its debt for the first time in its history as its economy collapses in its worst crisis in 70 years.

The country’s central bank confirmed that the country had missed a 30-day grace period for missed interest payments on two international sovereign bonds, which had expired on Wednesday.

Central Bank of Sri Lanka Governor P Nandalal Weerasinghe said the country was now in a “pre-emptive default.”

“Our position is very clear, we said that until they come to the restructure, we will not be able to pay. So that’s what you call pre-emptive default,” Weerasinghe said.

The governor added that the central bank is finishing up plans to restructure the country’s debt and will submit proposals to the cabinet soon.

Sri Lanka’s economy has been battling the pandemic, rising energy prices, and populist tax cuts.

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