COLOMBO: Sri Lanka's Finance Ministry announced on Tuesday that the government has decided to halt normal debt servicing for all related debts for the time being until it can put together an orderly and consensual restructuring plan with the International Monetary Fund (IMF).
The Ministry noted in a statement that debt obligations will be modified in accordance with an IMF-supported economic adjustment programme that would apply to all debt repayments.
Credit facilities and any payments released under current credit facilities are not subject to this regulation and would be serviced normally.
Creditors, including foreign governments that had lent to the South Asian nation, were free to capitalise any interest payments owing to them starting Tuesday afternoon or opt for return in Sri Lankan rupees, according to the Finance Ministry.
Sri Lanka is currently experiencing a severe economic crisis, with shortages of foreign exchange, fuel, and other necessities, as well as soaring inflation.