‘SL faces substantial credit risk, default a real possibility’

TPL | Published: 7:00 PM Oct 19 2021
Business ‘SL faces substantial credit risk, default a real possibility’

Sri Lanka’s economy faces substantial credit risk, with default ‘a real possibility’, Fitch Ratings said today (19).

The Singapore-based ratings agency also revised Sri Lanka’s growth forecast for 2021 to 3.3 per cent from 3.8 pc, due to the surge in coronavirus cases in July-August.

“Sri Lanka’s public and external finances remain fragile, as reflected in our ‘CCC’ rating in place since November 2020 and affirmed in June 2021. A rating at this level indicates substantial credit risk, with default ‘a real possibility,’ Fitch said.

The country’s external liquidity position remains stressed, with 26 billion US dollars in sovereign foreign-currency obligations coming due between now and 2026.

Fitch projected the country’s foreign-exchange reserves to plummet to 2.5 billion USD by 2023, down from the 3.5 billion USD in August 2021, following a grant received through the International Monetary Fund’s special drawing rights to the tune of 780 million USD.


TPL | Published: 7:00 PM Oct 19 2021

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