Sri Lanka Unilaterally Suspends External Debt Payments, Needs Money for Essentials

Sumber: Reuters | Editor: Anastasia Lilin Yuliantina

KONTAN.CO.ID - COLOMBO/LONDON. Sri Lanka's central bank said on Tuesday, it had become challenging and impossible to repay external debt. Sri Lanka tries to use its dwindling foreign exchange reserves to import essentials like fuel.

The island nation's reserves have slumped more than two-thirds in the past two years. Tax cuts and the Covid-19 pandemic badly hurt its tourism-dependent economy and exposed the government's debt-fuelled spending. Street protests against shortages of fuel, power, food and medicine have gone on for more than a month.