(MENAFN) As the nation grapples with its greatest financial crisis in over 70 years, Sri Lanka has foreclosed on its debt for the first time in its history.
It comes after a 30-day grace period to refund delinquent debt interest payments of USD78 million (pound 63 million) ended on Wednesday.
Sri Lanka's central bank governor declared the nation to be in "pre-emptive default".
When administrations are unable to satisfy some or all of their debt obligations to creditors, defaults occur.
It can undermine a nation’s reputation, making it more difficult to borrow money on foreign markets, further eroding trust in its currency and economy.
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