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Economy

Sri Lanka pays foreign debt at expense of domestic economy

Drop in tourism income and migrant worker remittances squeeze government income

A man counts Sri Lankan rupee notes at a currency exchange shop in Colombo, Sri Lanka. A U.S. dollar can fetch about 40 more rupees on the streets than at banks.

COLOMBO -- Sri Lanka's central bank trumpeted the country's settling of a maturing $500 million sovereign debt on Tuesday, affirming the ultranationalist government's decision to use its scarce available foreign currency reserves to assuage overseas bondholders while its beleaguered public takes another economic hit.

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