Heavy debt-ridden Sri Lanka declared itself bankrupt, what will happen to the money of all countries including China?

Sri Lanka, which is facing economic crisis, has announced on Tuesday that it will not be able to repay its foreign debt of $ 51 billion. After weeks of economic turmoil, the island nation of Sri Lanka announced on Tuesday that it would not be able to repay all of its $51 billion in debt after running out of foreign currency for imports.

The situation in Sri Lanka is getting worse day by day. Violent demonstrations have started in the country, the public is asking the President and the Prime Minister why our country has become a quagmire? The country’s treasury has become empty and the prices of food and drink are touching the sky. But now Sri Lanka, which is facing financial crisis, has declared itself bankrupt. Sri Lanka, which is facing economic crisis, has announced on Tuesday that it will not be able to repay its foreign debt of $ 51 billion. After weeks of economic turmoil, the island nation of Sri Lanka announced on Tuesday that it would not be able to repay all of its $51 billion in debt after running out of foreign currency for imports.

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Finance Ministry said this

The island nation is battling the worst economic downturn since independence, with regular blackouts and severe shortages of food and fuel. Sri Lanka’s finance ministry said in a statement that creditors, including foreign governments, should either wait for any of their interest payments from Tuesday or opt for payment in Sri Lankan rupees.

how much debt sri lanka

China has a debt of $5 billion on Sri Lanka. Apart from this, Sri Lanka has taken another $ 1 billion loan from China, which it is trying to repay in installments. Along with this, sovereign bonds of $ 500 million are also owed to Sri Lanka. China’s debt is around 15 percent of the country’s total debt. The country has 13 percent of the Asian Development Bank, 10 percent of the World Bank, 10 percent of Japan and 2 percent of India.

How is the scale determined?

Many economic forces work together in declaring a country bankrupt. Declaring a country bankrupt is not the same as declaring a company bankrupt. But the position of monetary policy of a country is dependent on many factors which also tell the status of a country. Along with this, investor confidence also tells about the bankruptcy status of a country. In which the rating of a company like Moody’s plays a big role. Rating agencies give loans by looking at the country’s financial responsibility history and defaults in past liabilities and the IMF’s current debt repayment plans. When a debtor is unable to repay his debtor on time, he is called insolvent.


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