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Sri Lanka repays US$4.2bn in foreign debt without defaulting in 2020: PM

ECONOMYNEXT – Sri Lanka has repaid 4.2 billion US dollars in foreign debt falling due and avoided sovereign default, Prime Minister and Finance Minister Mahinda Rajapaksa said.

“We were able to stabilize the exchange rate, which was steadily depreciating then at around the Rs.185 (to the US dollar level) and to service the foreign debt of 4,200 million dollars averting the country being classified into a debt default status,” Prime Minister Rjapaksa told parliament.

He said dire predictions about default had been made but it had not happened.

Sri Lanka’s credit was downgraded to ‘B-‘ by Fitch and Standard and Poor’s in 2020 as the rupee fell amid money printing in March and April 2020. Moody’s later downgraded the credit to Caa1 (CCC+), which is barely above default.

Prime Minister Rajapaksa was speaking at a debate on a 2020 budget which sought to get covering approval for spending incurred before the new parliament was elected.

Opposition members charged that the administration had spent money illegally, and mis-used the authority given by the constitution to the President until the new parliament sat.

Sri Lanka’s 2021 budget is to be presented to parliament on November 17. (Colombo/Nov12/2020)

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