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00:00Sri Lanka has defaulted on its debt. This is according to the central bank governor in Sri Lanka. Sri Lanka will not service its dollar debt until it completes a debt restructuring. Put it in putting it in what is called pre-emptive default on its foreign debt. According to the central bank governor and the government the government government actually said last month that it had halted payments on foreign debt to present dollars for food and for fuel imports. And of course they were idiosyncratic as stories to deal with Sri Lankan man. But there's also the broader emerging markets narrative of strong dollar and pressure of higher food costs that I know you've been focused on. Yeah I think it's that latter element that's really interesting about this story. This default was always coming in Sri Lanka coming for quite a while and it is priced in the markets. The immediate impact won't be large. It's not a big market but it's going to remind investors that there are an increasing number and it is an increasing number of emerging markets that are really really vulnerable to this food price and energy price inflation problem that we have. And it's only going to get worse this year. So we're going to see more political unrest and we are going to see more defaults across some other emerging markets later on this year.

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Sri Lanka Enters Default and Warns of Surge in Inflation

Sri Lanka fell into default for the first time in its history as the nation missed grace period payments on bonds worth $78 million. Anna Edwards and Marc Cudmore have more on Bloomberg Television. (Source: Bloomberg)

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