Sri Lanka announces it will default on all its external debt of $51 billion

Colombo, Apr 12: Sri Lanka today announced defaulting on all its external debt. Colombo said that it would default on its $51 billion external debt pending a bailout from the International Monetary Fund.

The finance ministry said that creditors, including foreign governments that had lent to the Sri Lanka were free to capitalise any interest payments due to them from Tuesday or opt for a payback in Sri Lankan Rupees.

The anti-government protests, which started on Saturday, continued to its third day on Monday.

Meanwhile, efforts to establish an all-party interim government also remained inconclusive as the talks between President Gotabaya Rajapaka and the group of independent MPs from his own ruling SLPP coalition failed to make progress on Sunday.

The gathering calling for the Rajapaksa family's resignation has continued their all night vigil.

Last week the entire Sri Lankan cabinet resigned apart from Mahinda Rajapaksa at a time when the country was facing its worst economic crisis since gaining independence from the UK in 1948.

President Gotabaya Rajapaksa and his elder brother, Prime Minister Mahinda Rajapaksa, continue to hold power in Sri Lanka, despite their politically powerful family being the focus of public ire.

The President has defended his government's actions, saying the foreign exchange crisis was not his making and the economic downturn was largely pandemic driven with the island nation's tourism revenue and inward remittances waning.

(With PTI inputs)