The Sri Lankan government announced on Tuesday a temporary suspension of repayment in all external debts of about $51 billion due to the worsening economic crisis in the country caused by the Covid-19 pandemic and the Ukraine war.
“We have lost the ability to repay foreign debt. It has come to a point that making debt payments are challenging and impossible,” Central Bank Governor Nandalal Weerasinghe said at the media briefing.
Sri Lanka’s foreign reserves stood at $1.93 billion last month, but it has around $4 billion in foreign debt payments that are due this year, according to BBC.
Half a million people have sunk into poverty since the pandemic, with rising costs forcing many to cut back on food, the Guardian reported.