In a sudden, though not unexpected development, Sri Lanka today announced the suspension of the island nation’s debt repayments.

Sri Lanka’s Treasury Secretary Mahinda Siriwardena announced this morning that the country will suspend debt repayments of debt, said to be in excess of US$ 50 billion.

He said that this was a temporary arrangement – for an interim period pending an orderly restructuring of debt. Officials took pains to clarify that this was not a move towards defaulting on the country’s external debts.

The affected debt would include the principal amount and the interest falling due after 1700 hour today, April 12 Sri Lanka time, Siriwardena said.

Analysts in the country see this as a first step in the direction of undertaking a restructuring of debts in the run-up to negotiating a financial bail-out package from the International Monetary Fund (IMF). The finance department’s top techno-bureaucrat said that bilateral support was expected.

The IMF program would move in parallel.

Central Bank Governor Nandalal Weerasignhe said inflows could now be used for essential imports.

The government has given multilateral and bilateral creditors to receive their dues in Sri Lankan rupees, though there are unlikely to be any takers since the value of the Sri Lankan rupee has tanked.

Apart from a slew of ill-planned moves like an overnight imposition of an organic farming regimen, the Sri Lanka government undertook a money-printing overdrive. The ill-advised steps and a general economic and political mismanagement have landed the island nation in an economic mess.

The runaway inflation has seen people step out on the streets and demands have been growing for Sri Lankan President Gotabaya Rajapaksa’s resignation.

This is a developing story and will be updated as more information arrives.