Sri Lanka has initiated a five-day bank holiday to facilitate the restructuring of $42 billion in domestic debt as the country grapples with its worst economic crisis since gaining independence. The government’s move aims to mitigate potential bank runs and market volatility. President Ranil Wickremesinghe assured the public that the restructuring would not lead to a collapse of the banking system, while the central bank chief, Nandalal Weerasinghe, emphasized the safety of local depositors’ funds. The World Bank has provided financial support, and the IMF has granted a bailout package, contingent on debt restructuring progress. The Sri Lankan economy has been severely impacted by the pandemic, high inflation, energy price hikes, and policy shortcomings.
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