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Sri Lanka

Sri Lanka's central bank chief confirms first foreign bond default

Weerasinghe offers hope on fuel crunch, points to political stability 'improvement'

Sri Lankans wait to buy kerosene in Colombo on May 18. The country's central banker says some funds have been secured to enable ships to replenish supplies.   © Reuters

COLOMBO -- Sri Lanka's central bank governor on Thursday confirmed the country had defaulted on foreign bonds and warned inflation could soar to 40%, but struck an optimistic note that a modicum of political stability was returning.

Addressing the expiration of a grace period on a pair of bonds worth $78 million the previous day, Gov. Nandalal Weerasinghe told reporters that the country's first default was not a "hard" one, since it had been telegraphed a month in advance.

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