Echelon - February 2019
Echelon - February 2019
English | 80 pages | True PDF | 16.7 MB
English | 80 pages | True PDF | 16.7 MB
Because so many competing interests are involved, Sri Lanka’s debt crisis mess will be much harder to unscramble. However, what’s abundantly clear is that loans from China aren’t the biggest problem. Around 15% of Sri Lanka’s foreign currency loans are from China, and most are at low interest rates and have long repayment periods.
Who then is causing a debt crisis?
In barely a decade since its first dollar loan, Sri Lanka has racked up $15 billion in International Sovereign Bonds. This is the equivalent of 54% of all foreign debt. Approximately $5.9 billion of those and other loans have to be repaid in 2019, and similarly large repayments are due over the next two years. Clearly Sri Lanka has binged on dollar loans from international financial markets, and poorly sequenced their maturity.
How Sri Lanka’s debt profile has changed also tells the tale of its rising costs, and it is this, and not necessary Chinese entrapment, that is causing Sri Lanka’s crisis. Debtoholic, our cover story, explores Sri Lanka’s severing debt crisis.
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