<p>Sri Lanka has defaulted on its debt payments for the first time in its history, a day after the cash-strapped country declared it doesn’t even have&nbsp;money to buy fuel even for one-day.</p>

<p>On Thursday, Sri Lanka’s central bank governor P Nandalal Weerasinghe said that island nation had fallen into a “pre-emptive default” on its debts.</p>

<p>“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,” Weerasinghe was quoted as saying, according to BBC.</p>

<p>“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," he added.</p>

<p>Pre-emptive defaults happen when a country&nbsp;fails to meet some or all of its debt payments to creditors. As a result, it&nbsp;damages a country's reputation, making it harder to borrow the money it needs on international markets, which can further harm confidence in its currency and economy.</p>

<p>According to the credit rating agency Moody’s, it is the first default by an Asia-Pacific nation this century.</p>

<p>Last month, Sri Lanka said that it would stop servicing its international debts to wrest the dwindling foreign currency reserves, which are essential for importing key items from overseas.</p>

<p>Watch |&nbsp;Sri Lanka defaults on its debt for first time in history</p>

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<p>It has to repay about $7bn of international loans this year, out of a total foreign debt pile worth $51bn. The country’s finance ministry has said it has $25m in usable foreign reserves.</p>

<p>The island nation is going through its worst economic crisis since independence in 1948.</p>

<p><strong>Also read |&nbsp;</strong><a href="https://www.wionews.com/south-asia/sri-lanka-runs-out-of-petrol-how-the-island-nation-lost-the-political-economic-battle-479821" hreflang="en">Explainer | Sri Lanka runs out of petrol: How the island nation lost the plot</a></p>

<p>Forty-per cent inflation, rising costs of petrol, medicines, cooking gas and other essentials has only put further misery on the people.</p>

<p>Also read |&nbsp;<a href="https://www.wionews.com/south-asia/sri-lanka-proposal-to-suspend-parliament-standing-orders-defeated-479787" hreflang="en">Sri Lanka: Proposal to suspend Parliament standing orders defeated&nbsp;</a></p>

<p>The economic crisis also triggered a political crisis in Sri Lanka, which led to the resignation of the country’s prime minister Mahinda Rajapaksa after violence ensued between protesters and the government supporters.</p>

<p><em>(With inputs from agencies)</em></p>

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Sri Lanka has defaulted on its debt payments for the first time in its history, a day after the cash-strapped country declared it doesn’t even have money to buy fuel even for one-day.

Sri Lanka has defaulted on its debt payments for the first time in its history, a day after the cash-strapped country declared it doesn’t even have money to buy fuel even for one-day. On Thursday, Sri Lanka’s central bank governor P Nandalal Weerasinghe said that island nation had fallen into a “pre-emptive default” on its debts. “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,” Weerasinghe was quoted as saying, according to BBC. “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," he added. Pre-emptive defaults happen when a country fails to meet some or all of its debt payments to creditors. As a result, it damages a country's reputation, making it harder to borrow the money it needs on international markets, which can further harm confidence in its currency and economy. According to the credit rating agency Moody’s, it is the first default by an Asia-Pacific nation this century. Last month, Sri Lanka said that it would stop servicing its international debts to wrest the dwindling foreign currency reserves, which are essential for importing key items from overseas. Watch | Sri Lanka defaults on its debt for first time in history It has to repay about $7bn of international loans this year, out of a total foreign debt pile worth $51bn. The country’s finance ministry has said it has $25m in usable foreign reserves. The island nation is going through its worst economic crisis since independence in 1948. Also read | Explainer | Sri Lanka runs out of petrol: How the island nation lost the plot Forty-per cent inflation, rising costs of petrol, medicines, cooking gas and other essentials has only put further misery on the people. Also read | Sri Lanka: Proposal to suspend Parliament standing orders defeated The economic crisis also triggered a political crisis in Sri Lanka, which led to the resignation of the country’s prime minister Mahinda Rajapaksa after violence ensued between protesters and the government supporters. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

For the first time, Sri Lanka defaults on its payments

<p>The Sri Lankan government on Tuesday announced it is defaulting on all its external debt.</p>

<p>The government had earlier announced it had appointed a panel on restructuring foreign debt amid the deepening economic crisis.</p>

<p>The island nation has been hit by rising inflation and fuel crisis. Sri Lanka's economy was hit badly during the coronavirus pandemic as the tourism industry was hit amid the lockdown two years ago.</p>

<p><a href="https://www.wionews.com/south-asia/sri-lankan-pm-mahinda-rajapaksa-says-government-is-working-to-overcome-economic-crisis-470293">Also Read:&nbsp;Sri Lankan PM says government working to overcome economic crisis</a></p>

<p>"Sri Lanka has decided to suspend normal debt servicing of all affected debts for an interim period pending an orderly and consensual restructuring of those obligations in a manner consistent with an economic adjustment program supported by the IMF," the country's finance ministry said.</p>

<p>Rating agencies had earlier warned of a potential default on its $51 billion foreign debt.&nbsp;</p>

<p><strong>Watch:&nbsp;Sri Lanka running out of life-saving medicines</strong></p>

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<p>In a letter stating its interim policy on servicing external public debt, the government said the COVID-19 pandemic and the Ukraine war had "eroded Sri Lanka's fiscal position" with its normal servicing of external public debt obligations becoming "impossible".</p>

<p>"Although the government has taken extraordinary steps in an effort to remain current on all of its external indebtedness, it is now clear that this is no longer a tenable policy and that a comprehensive restructuring of these obligations will be required," it added.</p>

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<p dir="ltr" lang="en">11,000 MT rice from <a href="https://twitter.com/hashtag/India?src=hash&amp;ref_src=twsrc%5Etfw">#India</a> reached <a href="https://twitter.com/hashtag/Colombo?src=hash&amp;ref_src=twsrc%5Etfw">#Colombo</a> on board ship Chen Glory today ahead of New Year celebration by people of 🇱🇰. 16,000 MT rice supplied under 🇮🇳's multi-pronged support to 🇱🇰 in the past week alone.These supplies which mark the special bond between 🇮🇳&amp;🇱🇰 will continue. <a href="https://t.co/PF3yE626hl">pic.twitter.com/PF3yE626hl</a></p>
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<p>Amid the economic crisis, the Rajapaksa's cabinet had resigned en masse after people took to the streets to protest against rising&nbsp;prices.</p>

<p>The Lankan president had imposed a state of emergency and requested members of political parties to join the cabinet, however, it was ruled out by the opposition members.</p>

<p>The government said it is seeking financial help from other multilateral and bilateral partners including the IMF.</p>

<p>(With inputs from Agencies)</p>


The Sri Lankan government on Tuesday announced it is defaulting on all its external debt. The government had earlier announced it had appointed a panel on restructuring foreign debt amid the deepening economic crisis.

The Sri Lankan government on Tuesday announced it is defaulting on all its external debt. The government had earlier announced it had appointed a panel on restructuring foreign debt amid the deepening economic crisis. The island nation has been hit by rising inflation and fuel crisis. Sri Lanka's economy was hit badly during the coronavirus pandemic as the tourism industry was hit amid the lockdown two years ago. Also Read: Sri Lankan PM says government working to overcome economic crisis "Sri Lanka has decided to suspend normal debt servicing of all affected debts for an interim period pending an orderly and consensual restructuring of those obligations in a manner consistent with an economic adjustment program supported by the IMF," the country's finance ministry said. Rating agencies had earlier warned of a potential default on its $51 billion foreign debt. Watch: Sri Lanka running out of life-saving medicines In a letter stating its interim policy on servicing external public debt, the government said the COVID-19 pandemic and the Ukraine war had "eroded Sri Lanka's fiscal position" with its normal servicing of external public debt obligations becoming "impossible". "Although the government has taken extraordinary steps in an effort to remain current on all of its external indebtedness, it is now clear that this is no longer a tenable policy and that a comprehensive restructuring of these obligations will be required," it added. 11,000 MT rice from #India reached #Colombo on board ship Chen Glory today ahead of New Year celebration by people of 🇱🇰. 16,000 MT rice supplied under 🇮🇳's multi-pronged support to 🇱🇰 in the past week alone.These supplies which mark the special bond between 🇮🇳&🇱🇰 will continue. pic.twitter.com/PF3yE626hl — India in Sri Lanka (@IndiainSL) April 12, 2022 × Amid the economic crisis, the Rajapaksa's cabinet had resigned en masse after people took to the streets to protest against rising prices. The Lankan president had imposed a state of emergency and requested members of political parties to join the cabinet, however, it was ruled out by the opposition members. The government said it is seeking financial help from other multilateral and bilateral partners including the IMF. (With inputs from Agencies)

Sri Lanka defaulting on all its external debt: Rajapaksa government

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For the first time, Sri Lanka defaults on its payments

Sri Lanka defaulting on all its external debt: Rajapaksa government