Sri Lanka’s external reserves dropped to $1.6 billion in November 2021, triggering alarm in different quarters. Foreign reserves draining so rapidly could only mean that a sovereign default is imminent, economists and thinktanks warned. American credit rating agency Fitch downgraded the island nation to a ‘CC’ rating, which is the lowest rating prior to default. Despite its mounting foreign debt over the years, Sri Lanka has never defaulted until now. The current economic meltdown – marked by a persisting dollar crisis, soaring living costs, and a possible food shortage this year – is threatening to dent that record. (Read More)
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