Sri Lanka unilaterally suspends external debt payments, says needs money for essentials


FILE PHOTO: People walk at the Central Bank of Sri Lanka building in Colombo February 12, 2013. REUTERS/Dinuka Liyanawatte

COLOMBO/LONDON (Reuters) -Sri Lanka's central bank said on Tuesday it had become "challenging and impossible" to repay external debt, as it tries to use its dwindling foreign exchange reserves to import essentials like fuel.

The island nation's reserves have slumped more than two-thirds in the past two years, as tax cuts and the COVID-19 pandemic badly hurt its tourism-dependent economy and exposed the government's debt-fuelled spending.

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