Sri Lanka defaults on debt for first time in its history

[JayM]

Sri Lanka defaults on debt for first time in its history

The governor of the country's central bank and two major credit rating agencies said it has defaulted.

www.bbc.com

I think we'll be seeing more of this in the near future, particularly countries which were foolish enough to borrow in anything other than their own currency. Fortunately, SA is in no immediate danger of defaulting due to borrowing almost exclusively in ZAR - but with bond yields at 10% it's only a matter of time until we can't roll over our debt anymore.

 

[ShaunSA]

Eelawn should just buy Sri Lanka

 

[Gordon_R]

Debt default is not just a theoretical problem:

Sri Lanka down to last day of petrol, new prime minister says

Ranil Wickremesinghe says the country's central bank will print money to pay government wages.

www.bbc.com

 

[rietrot]

Seems like they have bigger political problems.

 

[RonSwanson]

Fortunately, SA is in no immediate danger of defaulting due to borrowing almost exclusively in ZAR - but with bond yields at 10% it's only a matter of time until we can't roll over our debt anymore.

Yet there are similarities which suggest that we aren't far off.

Soaring inflation has meant some foods, medication and fuel are in short supply, there are rolling blackouts and ordinary people have taken to the streets in anger with many blaming the Rajapaksa family and their government for the situation.

Seems like they have bigger political problems.

True for them, and true for us as well.

 

[ponder]

Sri Lanka meltdown exposes China loan policy: 5 things to know

Beijing could complicate Colombo's IMF talks as other borrowers watch closely

asia.nikkei.com

 

[airborne]

Sad news, Sri Lanka is an epic place.
Difficult situation to get out of, even if all the right things are done it’ll be years till things stabilise, the key is not getting to the point of default in the first place.

 

[zerocool2009]

Such a friendly country!

Been there many times!

I am the sole developer (IT) on a huge government system!

Sad news indeed!

 

[neoprema]

It is a pity. But they’re not alone. A few countries will be in this boat as they were forced to borrow due to the pandemic crisis and now it’s just another issue on top of another.

 

[Gordon_R]

Conditions are getting worse:

Non-essential petrol sales halted for two weeks in Sri Lanka

The country says it is saving its limited fuel supplies for vehicles used for essential services.

www.bbc.com

 

[ShaunSA]

Have they tried re-naming it yet?

 

[surface]

Have they tried re-naming it yet?

soon to be Xi Jin Lan ka.

 

[3WA]

At least they won the ODI series against Australia.

 

[TelkomUseless]

Send in the Cubans to fix it.

 

[Thugscub]

Russia next.

 

[CommonSense]

Maybe a bit selfish, but I hope this does not affect their exports a lot.
The best tea in the world IMHO is Dilmah tea and that is all tea I really enjoy these days.
The other brands just don't cut it anymore.

 

[Supervan II]

So long (pronounced Ceylon) Sri Lanka!

 

[The Trutherizer]

China (the government) lends money like a commercial bank. (except that bank China owns oil, manufacturing, mining, etc "companies" that they love bringing into the T&Cs)
Unlike most bilateral and all multilateral infrastructure aid lenders (latter for example the IMF).

Callous lending.

 

[Gnome]

China (the government) lends money like a commercial bank. (except that bank China owns oil, manufacturing, mining, etc "companies" that they love bringing into the T&Cs)
Unlike most bilateral and all multilateral infrastructure aid lenders (latter for example the IMF).

Callous lending.

Lending by governments, especially in Africa has been for far too long without consequence.
So although I appreciate the fact that China is basically trapping them in an agreement.

The only difference between China and other banks is the power backing it.
You can tell an international bank to GFY but you can't tell China to do that.

And frankly the world needs lending to become as serious for governments as it is for individuals.
There needs to be serious consequences to defaulting on a loan

The rest of us on the planet are essentially paying with inflation for defaulting countries lending from the likes of the IMF that just keep giving a hand like some friendly grandpa lending a helping hand to his drug addled grandchild.

 

[The Trutherizer]

Lending by governments, especially in Africa has been for far too long without consequence.
So although I appreciate the fact that China is basically trapping them in an agreement.

The only difference between China and other banks is the power backing it.
You can tell a international bank to GFY but you can't tell China to do that.

And frankly the world needs lending to become as serious for governments as it is for individuals.
There needs to be serious consequences to defaulting on a loan

See there's a difference between countries and individuals that you might be ignoring.

A country is a collection of individuals. Those who ultimately make the decisions to take such loans are in the order of 1/10 000 000th of all the individuals in the country.
Those who are stuck with the consequences, if such borrowing/lending was reckless, callous or even malign, are in the order of 9 999 999/10 000 000 of a country.

I sympathise with those who were not involved in organising this screwup. The people of Sri Lanka. And the thing is... There's no way this doesn't affect ALL countries. Even China. Negatively. In the long run.