(Reuters) – S&P Global (NYSE:) Ratings cut Sri Lanka’s rating as an issuer of foreign currency debt to ‘selective default’ after the South Asian country missed sovereign bond interest payments, S&P said on Monday.

After a grace period of 30 days, the bonds that were late on payments in 2023/2028 had their ratings reduced to “default” and could see their overall rating drop to “D”.

S&P said it does not expect the government to make payments during that period.

Sri Lanka’s economic meltdown tracks its roots to 2019, when President Gotabaya Rajapaksa’s government approved a large tax cut that depleted the treasury coffers even more than expected.

COVID-19’s weight further reduced revenues. Import costs soared, and the situation became so bad that large-scale civil unrest was a common occurrence.

Sri Lanka had stopped making its payments on its debts earlier in the month, and approached International Monetary Fund.

According to the IMF, it conducted “fruitful technical talks” with Sri Lanka over the weekend regarding Sri Lanka’s loan request. The World Bank, however, stated it was currently preparing an aid package.

Refinitiv data shows that Sri Lanka currently has approximately $14 billion of outstanding foreign bonds and $26 trillion in local currency debt.

“The negative outlook on our ‘CCC-‘ long-term local currency sovereign rating on Sri Lanka reflects the high risk that the government could restructure its local currency debt amid the country’s economic, external and fiscal pressures,” S&P said in a statement.

Half an hour after trading ended in Sri Lanka, the stock market shut down. Shares had fallen nearly 10% since Monday’s first session of trading. The central bank raised its interest rates by two weeks earlier to curb inflation.