Fitch Downgrades Sri Lanka’s Debt Rating Amid Political Crisis

Fitch has downgraded Sri Lanka’s long-term debt rating in the latest blow to the cash-strapped country as it grapples with ongoing political turmoil, the Financial Times reported. The ratings agency on Tuesday said it had downgraded Sri Lanka's long-term foreign-currency issuer default rating to B from B+. The move reflected “heightened external refinancing risks, an uncertain policy outlook, and the risk of a slowdown in fiscal consolidation as a result of an ongoing political crisis” following president Maithripala Sirisena’s sudden replacement of prime minister Ranil Wickremesinghe in late October, Fitch said in a statement. Analysts have warned for several months about Sri Lanka’s weak fiscal position and urgent refinancing needs amid low foreign exchange reserves and high near-term debt obligations – including to China. Read more