Sri Lanka’s decision today to suspend payments to bond holders is designed to pave the way for a deal with the IMF and an orderly rescheduling of its debts. The diverse array of creditors to Sri Lanka could make a debt restructuring programme difficult to achieve, and our analysis suggests that recovery rates are likely to be in the region of 50%.
Drop-In (13th April, 16:00 SGT/09:00 BST): Will political turmoil in Pakistan and Sri Lanka lead to debt defaults? Join our EM economists this Wednesday for a discussion about economic and political turmoil in South Asia. Register now
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