LONDON, Oct 28 (Reuters) – Sri Lanka’s government bonds fell heavily on Wednesday as the United States ratcheted up pressure on the country’s government over its ties with China.
U.S. Secretary of State Mike Pompeo, who was visting Sri Lanka as part of a four-leg Asian tour, said the Chinese Communist Party was operating as a “predator” in the country and had brought “bad deals” and “lawlessness”.
Worries that the COVID-19 crisis will make it hard for Sri Lanka to pay its debts have already seen its bonds lose over 40% of their face value this year.
Wednesday’s falls saw its 2022 dollar-denominated bonds shed nearly 5 cents, according to Tradeweb data. Meanwhile its 2025, 2026 2027 and 2028 bonds all dropped to the 55 cents on the dollar threshold.