Colombo - Crisis-stricken Sri Lanka Tuesday announced it would default on its $51 billion external debt pending a bailout from the International Monetary Fund.
The finance ministry said creditors, including foreign governments that had lent to the South Asian nation, were free to capitalize any interest payments due to them from Tuesday afternoon or opt for payback in Sri Lankan rupees.
-Sri Lanka's Prime Minister Mahinda Rajapaksa pleaded for "patience" Monday as thousands continued to take to the streets to protest his family's rule, with public anger at a fever pitch over the country's crippling economic crisis.
Sri Lanka's 22 million residents have seen weeks of power blackouts and severe shortages of food, fuel and even life-saving medicine in the country's worst downturn since independence in 1948.
Protesters have rallied daily since Saturday against President Gotabaya Rajapaksa -- Mahinda's younger brother -- in Colombo and across the island nation, chanting "Gota go home" and calling for his government's removal.
In his first address since the crisis, Mahinda -- the patriarch of the powerful Rajapaksa family omnipresent in Sri Lanka's politics for two decades -- said he needed more time to pull the nation out of the deep end.
"Even if we can't stop this crisis in two or three days, we will solve it as soon as possible," Rajapaksa said in his televised address.
"Every minute you protest on the streets, we lose an opportunity to earn dollars for the country," he said.
"Please remember that the country needs your patience at this critical moment."
Pressure on the powerful Rajapaksa family has intensified in recent days, with the country's vital business community also withdrawing support for them over the weekend.
Mahinda did not directly address the growing calls for him and Gotabaya to step down, but he defended his administration by saying that opposition parties had rejected their offer to form a unity government.
"We invited all other parties to come forward and take up the challenge, but they did not, so we will do it on our own," he said, also blaming Sri Lanka's ballooning foreign debt on the pandemic.
While the coronavirus-spurred restrictions and stoppages have torpedoed Sri Lanka's vital tourism-driven economy, experts say the crisis was exacerbated by government mismanagement, years of accumulated borrowing and ill-advised tax cuts.
The government is preparing for bailout negotiations with the International Monetary Fund this week, with finance ministry officials saying that sovereign bond-holders and other creditors may have to take a haircut.
Srilankaexpects $3 billion from the IMF to support the island's balance of payments in the next three years.