Sri Lanka will temporarily suspend foreign debt payments to avoid a hard default, the central bank governor said on Tuesday, with its limited foreign reserves required for imports of essential items such as fuel.
"It has come to a point that making debt payments are challenging and impossible. The best action that can be taken is to restructure debt and avoid a hard default," Governor P Nandalal Weerasinghe said.
Sri Lanka is due to start talks with the International Monetary Fund on a loan programme next week, with the country suffering from prolonged power cuts alongside shortages of food and medicines.
The island nation's foreign reserves stood at a paltry $1.93 billion at the end of March, with foreign debt payments of around $4bn due this year, including a $1bn international sovereign bond maturing in July.
The governor said the action was being taken in good faith, emphasising that the country of 22 million people had never defaulted on its debt payments.
"This will be on a temporary basis until we come to an agreement with creditors and with the support of a programme with the IMF," said Mr Weerasinghe, who took office last week amid growing public unrest triggered by the economic crisis.
"We need to focus on essential imports and not have to worry about servicing external debt," he said.
JP Morgan analysts estimate Sri Lanka's gross debt servicing would amount to $7bn in 2022 and a current account deficit of around $3bn.
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Catholic priests and sisters hold placards during a demonstration against the economic crisis in Colombo, the capital of Sri Lanka. All photos: AFP -

Catholic priests and sisters hold placards during a demonstration against the economic crisis in Colombo. -

Protesters lash out after a surge of prices and a shortage of fuel and other essential commodities outside the president's office in Colombo. -

All 26 Cabinet ministers resigned after thousands defied a national state of emergency and curfew, and joined street protests denouncing the government. -

The curfew has been lifted but the president and his elder brother Prime Minister Mahinda Rajapaksa continue to hold on to power. -

Sri Lankans have endured long queues to buy fuel, cooking gas, foods and medicine, most of which come from abroad and are paid for in hard currency. -

The fuel shortage has caused rolling power cuts lasting several hours a day. -

The extent of the crisis became clear when Sri Lanka could not pay for imports of basic supplies because of its mounting debts and dwindling foreign reserves. -

Sri Lanka’s usable foreign reserves reportedly amount to be less than $400 million, yet it is saddled with about $7 billion in foreign debt obligations for this year. -

Police used water cannon to disperse angry protesters who marched toward the Rajapaksa family home in southern Sri Lanka, demanding that they quit. -

The president had appealed to people to limit their use of power and ‘extend their support to the country’ but the crisis has intensified since the main opposition party rejected his call to form a unity government. Reuters
The specs
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Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
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Price: From Dh117,059
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SPECS
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Korean Film Festival 2019 line-up
Innocent Witness, June 26 at 7pm
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Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
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5pm: Maiden (PA) Dh80,000 (Turf) 1,600m; Winner: Aahid Al Khalediah II, Pat Cosgrave (jockey), Helal Al Alawi (trainer)
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
England Test squad
Ben Stokes (captain), Joe Root, James Anderson, Jonny Bairstow, Stuart Broad, Harry Brook, Zak Crawley, Ben Foakes, Jack Leach, Alex Lees, Craig Overton, Ollie Pope, Matthew Potts
The specs: Aston Martin DB11 V8 vs Ferrari GTC4Lusso T
Price, base: Dh840,000; Dh120,000
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Power: 509hp @ 6,000rpm; 601hp @ 7,500rpm
Torque: 695Nm @ 2,000rpm; 760Nm @ 3,000rpm
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Zakat definitions
Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.
Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.
Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.
Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.
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The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
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Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
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'Top Gun: Maverick'
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ICC Women's T20 World Cup Asia Qualifier 2025, Thailand
UAE fixtures
May 9, v Malaysia
May 10, v Qatar
May 13, v Malaysia
May 15, v Qatar
May 18 and 19, semi-finals
May 20, final
MATCH INFO
Fixture: Thailand v UAE, Tuesday, 4pm (UAE)
TV: Abu Dhabi Sports

