Sri Lanka Temporarily Declares Default... External Debt of 63 Trillion Won

The cityscape of Colombo, the capital of Sri Lanka, where a state of emergency has been declared due to anti-government protests protesting the economic crisis.
[Image source=Yonhap News]

[Asia Economy Reporter Choi Dong-hyun] Sri Lanka, which is experiencing the worst economic crisis since its independence in 1948, has effectively declared default (debt default).

According to foreign media including AFP on the 12th (local time), the Central Bank of Sri Lanka announced that it will temporarily suspend repayment of its external debt amounting to $51 billion (62.9 trillion won) until the International Monetary Fund (IMF) provides bailout funds.

The governor of the central bank stated, "To avoid a hard default (a practical default where private bondholders incur losses), we are temporarily deferring external debt payments," adding, "The limited foreign currency reserves will be used to import essential items such as fuel."

It is known that Sri Lanka's foreign currency reserves currently remain at only about $1.93 billion.

This content was produced with the assistance of AI translation services.