Faced with critically low forex reserves, Sri Lanka on Tuesday announced that the crisis-stricken country will default on its external debt pending a bailout package from the International Monetary Fund.
A statement from the finance ministry said, “it shall be the policy of the Sri Lankan government to suspend normal debt servicing…..shall apply to amounts of affected debts outstanding on April 12, 2022”.
The policy shall be in effect for all international bonds, all bilateral loans excluding swaps between the Central Bank and a foreign central bank, all loans with commercial banks and institutional lenders, it said.