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Sri Lanka debt default ‘has begun’, says leading rating agency

Sri Lanka will soon default on its debts according to two credit rating agencies. Fitch Ratings lowered its assessment of Sri Lanka citing the beginning of a sovereign default process. S&P Global ratings also stated that default is virtually certain. Sri Lanka announced that it will temporarily default on its debts.

Sri Lanka is currently facing its worst economic crisis in more than 70 years. There have been protests over power cuts and rising costs of food and fuel and officials have urged Sri Lankans abroad to send money home. The governor of the country’s central bank asked for donations in US dollars, euros and sterling on Wednesday. The country has a 30 day grace  period to make its payment after it is due to make $78m of interest payments on Monday. Should Sri Lanka not pay in 30 days, it will be the country’s first default on its foreign debt since 1948, when the country became independent from the UK.

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