Sri Lanka to default on debt, no money for fuel, minister says
Lining up to buy kerosene oil for cooking in Colombo, Sri Lanka, on May 17, 2022. (Eranga Jayawardena / AP)
Sri Lanka is expected to be placed into default by rating agencies on Wednesday after the non-payment of coupons on two of its sovereign bonds, while the energy minister said the country had run out of money to pay for fuel.
An economic crisis unprecedented in the country's history since independence in 1948 has led to a critical shortage of foreign exchange, that saw it miss two coupon payments on sovereign bonds on April 18.
Sri Lanka has already said it is unable to make the coupon payments, and a 30-day grace period ends on Wednesday.
S&P has said the ratings on the bonds, maturing in 2023 and 2028, have already been cut to 'default' and the country's overall rating could be further cut to 'D' on confirmation of the non-payment after the grace period ends. Read full story
Sri Lanka currently has no dollars to pay for petrol shipments, Power and Energy Minister Kanchana Wijesekera told parliament, appealing to people to stop queuing for the next two days.
A petrol shipment has been at Colombo port since 28 March but the government has been unable pay, he added.
"There aren't enough dollars available to open letters of credit," he said.
"We are working to find funds but petrol will not be available at least until the weekend. The very small reserve stock of petrol is being released for essential services like ambulances," he said.
Prime Minister Ranil Wickremesinghe said on Wednesday the country had secured US$160 million in bridge financing from the World Bank, but it was not clear if the funds could be used for fuel payments.
"The statistics have gone haywire," he said. "But the reality is we don't even have $1 million."
Hit hard by the pandemic, rising oil prices and populist tax cuts, Sri Lanka's dire economic situation has led to spiralling inflation and shortages of essential supplies, bringing thousands of onto the streets in protest.
Violence between pro- and anti-government factions and police left nine dead and more than 300 injured last week, and was followed by the resignation of former prime minister Mahinda Rajapaksa.
Reporting by Uditha Jayasinghe and Alasdair Pal; Editing by Tom Hogue and Raju Gopalakrishnan
YOUR FINANCES
Stocks are down, but here's why experts say you shouldn't panic
As stocks continue to slump, it can be easy to let your emotions take over if you've got money invested in the market. But experts agree that there's no need to panic if you're invested in the right type of portfolio with the right level of risk.
My landlord is increasing my rent – what should I do?
With increasing rent prices likely to be the reality for many Canadian tenants, some may be wondering how to navigate rising costs, or whether any course of action can be taken, if any. Legal experts across the country share their advice on how to handle a rent hike.
What your Canada Day BBQ will cost with hot inflation
The Canada Day long weekend is the perfect time for burgers on the grill, cold drinks and time with family and friends. Yet a backyard barbecue comes with a bigger price tag this year as food prices soared 9.7 per cent in May.
New clean fuel regulations to raise gas prices, affect low-income Canadians most
New federal regulations to force down the greenhouse gas emissions from gasoline and diesel will cost Canadians up to 13 cents more per litre at the pump by 2030.
OPINION | Should you still be saving money with inflation at 7.7 per cent?
With inflation reaching a 40-year high, many Canadians have been left in a state of worry. Not only about the rising prices of consumer goods, but whether or not they should continue to save money. It’s not such a simple question, and it depends greatly on your circumstances, contributor Christopher Liew explains in an exclusive column for CTVNews.ca.
Almost half of Canadians are doing worse financially than the previous year: survey
As inflation rates soar to the highest they've been in Canada in nearly forty years, nearly half of Canadians say that right now, they're doing worse financially than they were at this time last year.
Here's how to save on your next grocery order, according to Canadian couponers
As Canada’s inflation soars, two ‘extreme couponers’ offer their advice on how to save at the grocery store.
4 things Canadians can do to save money on their groceries during inflation
With Statistics Canada reporting a 9.7 per cent increase in food costs over the last year, Canadians are being pushed to find ways to pinch pennies at the grocery stores. Here are some ways to save.