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Should Sri Lanka default on 18 Jan. sovereign bond? | Daily FT

Should Sri Lanka default on 18 Jan. sovereign bond? | Daily FT

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by January 12, 2022 General, General
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Daily Financial Times

The Governor of the Central Bank said last week, Sri Lanka has earmarked $ 500 million to repay a maturing sovereign bond on 18 January. However, several business leaders said Sri Lanka should take a rain check. Dr. Shanta Devarajan a former acting chief economist of the World Bank said honouring the maturing debt was reckless for two reasons. Firstly, Dr. Devarajan noted, “Sri Lanka is facing an acute shortage of foreign exchange – people queue in long lines to buy cooking gas; there is no powdered milk; food prices are rising rapidly; power cuts are becoming frequent. This $ 500 million coul…

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