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Sri Lanka taps forex reserve to whittle down debt

Billions more owed this year, much of it to China, after market fundraising fails

The gateway to Hambantota port in Sri Lanka, now controlled by the Chinese. (Photo by Yuji Kuronuma)

NEW DELHI -- Sri Lanka paid back $1 billion of its external debt Monday by tapping its foreign currency reserve, Central Bank of Sri Lanka Gov. Indrajit Coomaraswamy said, after attempts to raise the funds from the international bond market failed.

The country had $6.9 billion in foreign exchange reserves at the end of 2018. Using those assets to repay the additional $4.9 billion in debt due by the end of 2019 would leave nothing.

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