In the worst financial crisis in more than 60 years, the country had an extra 30 days to pay off its debts.
But even though that time has passed, the country has not been able to lend 8 million. The BBC reported this information in a report.
The country’s central bank governor says his country is now in “pre-MTV default”.
Later on Thursday (May 19), the world’s top two debt rating agencies also reported that Sri Lanka had defaulted.
When a government fails to repay some or all of the debtors’ debt, that government is called a defaulter.
As a result, the country’s reputation with investors is tarnished, making it difficult to obtain loans from international markets when needed.
This further damages the country’s currency and economy.