Sri Lanka is on the brink of default after missing payments on two of its sovereign bonds, as a 30-day grace period expired on Wednesday without the country making the required coupon payments. Rating agencies are expected to downgrade the nation's credit status, marking a significant escalation in its ongoing economic crisis.
Energy Minister Kanchana Wijesekera informed parliament that Sri Lanka has run out of foreign currency to pay for fuel imports. He urged citizens to stop queuing for petrol during the next two days, acknowledging the government's inability to secure shipments due to the lack of funds.
In the capital city of Colombo, motorists, auto-rickshaw drivers, and residents formed long lines at fuel stations in hopes of purchasing petrol and kerosene for cooking. The country's 22 million people are enduring severe hardships, including record-high inflation, prolonged power blackouts, and growing food insecurity.
The economic turmoil has severely disrupted daily life, with essential services crippled by shortages. The government's inability to import fuel has not only affected transportation but also exacerbated power outages, as fuel is a critical resource for electricity generation.
Analysts warn that the impending default could further isolate Sri Lanka from international financial markets, complicating efforts to secure emergency funding and restructure existing debts. The crisis underscores the urgent need for economic reforms and international assistance to stabilize the nation's economy.
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Sri Lanka expected to be placed into default after missing payments
cgtn.com
