Sri Lanka’s finance ministry has suspended payments on its government bonds, breaking what it called its “unblemished record of external debt service” in a deepening economic and currency crisis.
In a statement on Tuesday, the ministry said keeping up with repayments had “become impossible”, adding that “although the government has taken extraordinary steps in an effort to remain current on all of its external indebtedness, it is now clear that is no longer a tenable policy”. It described the suspension as a “last resort”.
A “comprehensive restructuring of these obligations” was needed, the ministry said, adding it had turned to the IMF for help in making a recovery plan and for financial assistance. Meetings with the IMF are due to start this month.