Sri Lanka defaults on all foreign debts

Finance Ministry says pandemic, Russia war has made payment of $51B 'impossible'.

Sri Lanka defaults on all foreign debts

Sri Lanka has defaulted on all of its foreign debt as the island nation grapples with mass anti-government protests amid its worst economic crisis.

The country's Finance Ministry said Tuesday the pandemic and ongoing Russia-Ukraine war have made the payment of $51 billion "impossible."

Last month, the International Monetary Fund (IMF) said the country's debt stock is unsustainable.

The ministry said Sri Lanka will suspend the payment of its debts for an interim period ahead of an IMF bailout.

It requested lenders to charge interest until the debt is paid, but not more than the rate in contracts.

The ministry also said that the government is taking emergency measures.

The island nation of 22 million people is facing an economic and political crisis with protesters taking to the streets amid a shortage of basic goods and government ministers resigning en masse.