Asia’s Most Distressed Sovereign Debt May Force Economy ‘Reset’

A would-be hub of Indo-Pacific commerce and global tourist gem, Sri Lanka was already struggling to deliver on grand visions before the coronavirus crisis struck the world economy, Bloomberg News reported. The next few months may determine its ability to avert a painful debt restructuring. The South Asian nation is locked in talks with the International Monetary Fund for emergency-financing aid, after its second longer-term program with the fund in less than a decade expired last Tuesday. It’s shaping up as a classic battle between a political program geared toward goosing growth, and concerns about raising enough money to rein an already-massive debt load. A sometime favorite among investors -- Sri Lanka as of late 2019 had the largest overweight among JPMorgan Chase & Co. clients in Asian frontier bond markets -- the country has faced down tough times in the past. Read more

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