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AP National Business

Sri Lanka settles sovereign bond payment as reserves dwindle

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Published 6:17 AM

By BHARATHA MALLAWARACHI
Associated Press

COLOMBO, Sri Lanka (AP) — Sri Lanka has paid $500 million due on sovereign bonds from its badly depleted foreign reserves despite calls by experts to defer it and use the sum to import essential food and medicine. The Indian ocean island nation is in its worst crisis in decades, with people facing shortages of essentials like milk powder, cooking gas and kerosene. Including the latest payment, Sri Lanka has foreign debt obligations exceeding $7 billion in 2022. Repayment of another bond worth $1 billion is due in July. Shortages of cash have hindered imports of essentials and raw materials for manufacturing, and shortages have worsened inflation, which surged to 12.1% in December from 9.9% in November. 

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