Sri Lanka defaults on debt for first time in its history

Sri Lanka has defaulted on its debt for the first time in its history as the country struggles with its worst financial crisis in more than 70 years.

It comes after a 30 day grace period to repay 78 million US dollars of unpaid debt interest payments has expired.

Defaults happen when governments are unable to meet some or all of their debt payments to creditors.

It can damage a country's reputation, making it harder to borrow the money it needs on international markets, which can further harm confidence in its currency and economy.

Sri Lanka is seeking to restructure debts of more than 50 billion US dollars it owes to foreign creditors, to make it more manageable to repay.

[Source:BBC]