When a country defaults?

Technically, the country has announced that it will not be able to adhere to its debt obligations, which includes interest and principal repayment on foreign bonds. But with the announcement, it will inevitably be in default when it fails to make the first of these payments.

Once known as the "Switzerland of the Middle East", Lebanon defaulted on a debt payment the first time in its history in March 2020 when it sunk in an economic crisis amid protests about corruption – quite similar to Sri Lanka’s current crisis

Argentina has been a more consistent defaulter, failing on its obligations the 9th time in May 2020 when it was unable to make a $500-mn payment. Its previous default in 2001 was at $100bn, the largest in history at the time

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In all, Sri Lanka has around $51 billion in external debt.

Just this calendar year, it owes $4 billion in repayments.

Of these, a significant $1 billion bond repayment is due on

July 25. In contrast, the country had foreign reserves of only

$1.9 billion left as of March, 2022. It is keeping those reserves for imports – the amount is adequate only for a month of import

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AUG-21

SEP-21

OCT-21

NOV-21

In Nov 2017, Venezuela was declared to be in partial default by rating agencies Fitch and S&P Global Ratings. Badly hit by falls in the price of oil and American sanctions, the economy was in a free fall, with shortages of food and medicines

DEC-21

JAN-22

SOURCE: CENTRAL BANK OF SRI LANKA

FEB-22

MAR-22

Greece became the 1st developed nation to default on debt to IMF when, on June 30, 2015, it missed a $1.7-bn repayment. Two weeks on it missed a 2nd payment. An emergency loan from EU, however, enabled it to pay off these debts