Has Sri Lanka become a 'debt default country' since yesterday?

 

Sri Lanka is facing the worst financial crisis in more than 70 years, for the first time in its history, the BBC reports.

The 30-day grace period for the payment of US $ 78 million in unpaid loan expired on Wednesday (May 18).

In this regard, the Governor of the Central Bank of Sri Lanka Nandalal Weerasinghe has stated that Sri Lanka is currently in a state of default.

A country becomes defaulted when the government of that country fails to pay the entire loan installment or part of the loan installment due.

If such a situation arises, the reputation of the country concerned will be damaged and it will be difficult for the country to obtain the required funds from the international market.

Doing so will also damage the confidence of the exchange and economy of the country concerned.

Commenting on this, Nandalal Weerasinghe said that his position was clear and that it would not be possible to pay the installments until the loans were restructured.