Fitch Downgrades Sri Lanka's Rating

Fitch Ratings has downgraded Sri Lanka's long-term foreign-currency issuer default rating, citing political upheaval that has resulted in the country having no functional government, the International New York Times reported on an Associated Press story. Fitch says it lowered the country's rating to B from B plus with a stable outlook, reflecting heightened external financing risks, uncertain policy outlook and a slowdown in fiscal consolidation. Sri Lanka is now without a government after a court ordered disputed Prime Minister Mahinda Rajapaksa and his ministers to refrain from conducting their duties as it hears a case challenging their eligibility to hold office after losing two no-confidence votes in Parliament. "Fitch believes the ongoing political upheaval, which has disrupted the normal functioning of Parliament, exacerbates the country's external financing risks, already challenged by the tightening of global monetary conditions amid a heavy external debt repayment schedule between 2019 and 2022," Fitch said in a statement. Read more

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