Sri Lanka is on the verge of default, with depleting foreign reserves and a USD 25 billion foreign debt needing to be repaid over the next five years. Only this year, about USD 7 billion is due.
According to a statement made on Saturday, the Colombo Stock Exchange will close for a week beginning Monday to provide investors a better understanding of the current economic reality in crisis-hit Sri Lanka, allowing them to make educated decisions.
Colombo Stock Exchange will be temporarily suspended for a period of five business days beginning April 18, 2022, according to the Securities and Exchange Commission of Sri Lanka (SEC). The Board requested that the SEC temporarily close the stock market, citing the country’s current condition.
As a result, the SEC decided to direct the CSE to temporarily close the stock market for a period of five working days beginning April 18 in accordance with the relevant regulations. Sri Lanka is on the verge of default, with depleting foreign reserves and a USD 25 billion foreign debt needing to be repaid over the next five years. Only this year, about USD 7 billion is due.
Sri Lanka is currently experiencing its worst economic crisis since its independence in 1948. The economic crisis prompted the island nation’s political turmoil, with demonstrators conducting extensive street rallies for weeks over lengthy power outages and shortages of petrol, food, and other daily essentials, asking for President Gotabaya Rajapaksa’s resignation.
The government stated on Tuesday that it will halt repayments of foreign debt, including bonds and government-to-government borrowing until the International Monetary Fund completes a loan restructuring scheme (IMF). President Rajapaksa has defended his government’s actions, claiming that the foreign exchange problem was not his fault and that the economic slowdown was mostly caused by a decline in tourism earnings and a drop in inward remittances.