Sri Lanka default looms as debt payments halted to save dollars

Sri Lanka's dollar bonds due July 2022 fell 1.8 cents on the dollar on Tuesday to a record low 46.07 cents. The rupee lost 0.5%.

Sri Lanka has warned creditors of a possible default and suspended payments on some foreign debt, an extraordinary step taken to preserve its dwindling dollar stockpile for essential food and fuel imports. 
 

All outstanding payments to bond holders, bilateral creditors and institutional lenders will be suspended until a debt restructure, the finance ministry said in a statement Tuesday. The newly appointed central bank governor, Nandalal Weerasinghe, said in a briefing that authorities are seeking to negotiate with creditors and warning of a possible default.

Sri Lanka’s dollar bonds due July 2022 fell 1.8 cents on the dollar on Tuesday to