CURRENT AFFAIRS

Detailed explanation-1: -Sri Lanka debt: Sri Lanka announces default on all of its $51 billion external debt - The Economic Times.

Detailed explanation-2: -As a result, we now count eight countries as currently being in default on their international bonds – Venezuela (since 2017), Lebanon, Suriname and Zambia (2020), and Belarus, Russia, Sri Lanka, and now Ghana (2022); nine if we include Ukraine after its consent solicitation agreed to suspend payments for two years.

Detailed explanation-3: -Argentina, Lebanon, and Ukraine are among the countries that have defaulted on their debt in recent years. The causes of a default can range from high debt burden and economic stagnation to political instability or a banking crisis. Determining what constitutes a default isn’t a simple matter.

Detailed explanation-4: -Sri Lanka has defaulted on a massive debt – over $56 billion, according to the World Bank – leaving many people scrambling without fuel, food, and medications. It was the South Asian country’s first default since becoming an independent country in 1948. The result? A growing political and humanitarian crisis.

Detailed explanation-5: -Defaults happen when governments are unable to meet some or all of their debt payments to creditors. It can damage a country’s reputation with investors, making it harder for it to borrow the money it needs on international markets, which can further harm confidence in its currency and economy.