Fitch Ratings has downgraded Sri Lanka’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to ‘B+’ from ‘BB-’.
A Negative Outlook has been assigned to the IDRs.
The issue ratings on Sri Lanka’s senior unsecured foreign- and local-currency bonds are also downgraded to ‘B+’ from ‘BB-’. The Country Ceiling is downgraded to ‘B+’ from ‘BB-’ and the Short-Term Foreign-Currency IDR is affirmed at ‘B’.
“The Sri Lankan sovereign faces increased refinancing risks on account of high upcoming external debt maturities. Further, the sovereign’s external liquidity position remains strained, reflecting pressure on foreign exchange reserves.
In Fitch’s view, this partly reflects a weakening in policy coherence that increases the likelihood of Sri Lanka requiring external liquidity support from the IMF and other multilateral institutions. Sri Lanka’s external liquidity ratio, as measured by Fitch at the end of 2015, was 70.9%, which is far below the median of ‘B’-rated peers’ of 171.9% and the ‘BB’ median of 152.4,”Fitch said.
www.dailynews.lk
A Negative Outlook has been assigned to the IDRs.
The issue ratings on Sri Lanka’s senior unsecured foreign- and local-currency bonds are also downgraded to ‘B+’ from ‘BB-’. The Country Ceiling is downgraded to ‘B+’ from ‘BB-’ and the Short-Term Foreign-Currency IDR is affirmed at ‘B’.
“The Sri Lankan sovereign faces increased refinancing risks on account of high upcoming external debt maturities. Further, the sovereign’s external liquidity position remains strained, reflecting pressure on foreign exchange reserves.
In Fitch’s view, this partly reflects a weakening in policy coherence that increases the likelihood of Sri Lanka requiring external liquidity support from the IMF and other multilateral institutions. Sri Lanka’s external liquidity ratio, as measured by Fitch at the end of 2015, was 70.9%, which is far below the median of ‘B’-rated peers’ of 171.9% and the ‘BB’ median of 152.4,”Fitch said.
www.dailynews.lk
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