SL displays tell-tale signs of sovereign default - News Summed Up

SL displays tell-tale signs of sovereign default


Even though Sri Lanka paid a $1 billion bond last week, Reuters reports that the country’s alarming state of its finances suggests it may have been just another step towards its first sovereign default. It was also underscored that the chances of Sri Lanka recovering from this situation without assistance is slim as expat remittances from overseas have been limited due to Covid-19, along with revenue generation from the nation’s tourism industry. “Reflecting the gravity of its plight, Colombo’s dollar-denominated government bonds are among the most distressed in the emerging market universe. Yet last week’s bond payment underscored the strong desire of the government to honour its debt and avoid the ignominy of a first sovereign default,” the analysis highlighted. “We see the forecasted rise in reserves as overly optimistic,” said Esther Yong, Asia fixed income research at Julius Baer.


Source: The Nation August 03, 2021 04:41 UTC



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