Debrief: What happens when Sri Lanka defaults on its debt

Lady Ridgeway Children's hospital healthcare workers silently protest against medicine shortage on April 19, 2022. PHOTO: AFP
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Sri Lanka has said it will halt repayments due on US$51 billion (S$70 billion) of foreign-owed debt amid an economic meltdown following missteps by the government in the face of back-to-back crises, including the Covid-19 pandemic and Russia's invasion of Ukraine.

The South Asian island nation is facing its worst economic crisis since independence in 1948 with slumping tourism revenue and soaring costs of imported commodities, including rice, draining foreign exchange reserves.

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