Global investors used several indicators to measure the looming default risk namely; crashing currencies, 1,000 basis point bond spreads and burned FX reserves. Sri Lanka, Lebanon, Russia, Suriname and Zambia are already in a debt default.
According to Reuters, a record number of developing countries are currently in trouble as many countries are exhibiting economic malaise similar to Sri Lanka. Analysts estimate that $400 billion of debt is at risk using 1,000 basis point bond spreads as the pain threshold.