Moody’s assigns B1 rating to Sri Lanka’s global bond offering

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By admin May 8, 2017 11:32

Moody’s Investors Service (“Moody’s”) has assigned a B1 rating to the Government of Sri Lanka’s US dollar bond offering maturing in 2027. The outlook on the Government of Sri Lanka’s issuer rating is negative.

Sri Lanka’s B1 rating balances the economy’s robust growth potential and higher income levels than similarly rated sovereigns against a high government debt burden, low debt affordability, and reliance on external borrowing combined with relatively low foreign exchange reserves.

Moody’s said the negative outlook on the rating is underpinned by Sri Lanka’s persistently weak fiscal metrics, in an environment of subdued GDP growth, which could lead to renewed balance of payments pressure; and the possibility that the effectiveness of the fiscal reforms envisaged by the Government may be lower than currently expected, which could further weaken fiscal and economic performance.

“Signs that the fiscal consolidation measures are ineffective or that the authorities’ commitment towards fiscal consolidation is wavering would point to a higher debt burden for longer and put negative pressure on the rating. In particular, if such developments were accompanied by a marked fall in foreign exchange reserves and lack of market access, a downgrade of the rating would be possible,” Moody’s said.

Conversely, evidence of effective reform implementation leading to significant and lasting improvements in tax collection would be positive. Such an improvement, coupled with reforms of macroeconomic policy that lead to more stable external financing conditions, would support a return of the rating outlook to stable.

Moody’s says the credit rating and any associated review or outlook has been assigned on an anticipated/subsequent basis. (Colombo Gazette)

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By admin May 8, 2017 11:32
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1 Comment

  1. N Wimaladasa May 9, 08:46

    In the fact remain that UNP led ‘compromised govt. ‘no assurances of set policies from past descent of MR good policies to bad felon distress of Economy of
    Sri lanka by UNP LEDAESHIP .

    Why risk of renewable policies here of that increased CB interest rate after CB Bond scam by Premier involvement by ex-CB governor initiative of fraud of billions of rupees has lost for the current govt .

    The inside trading of CB bonds by Primer and ex-CB governor axis an engagement of Perpetual Traders of Ex-CB governor son-in Law company that Treasury of Sri lanak lost billions of tax payers money.

    Budget deficit has widen and National Debt has short up 30% of than previous nation Debt.

    EVEN DEBT OF COUNTRY THAT NO LONGER SOMETHING FOREING AND PRIVITE SECTOR IS NOT PREPARED TO DO MORE. YET IT IS FAR FROM CLEAR THE UNP-PRIMER, PRESIDENT & CBK OF UNP’S THAT ” GOVT. OF COMPROMISED” OF THE SRI LANKAN EXCECUTIVE READY TO TAKE LIABILITES ?

    The foreign investors has fly back ,national reserved has rapidly declined ,the damages to economy is unbelivial. While VAT tax has increased ,local investment has lost all field, unemployment gone up, uncertainties of economy has lost for future growth.

    According CB resent report this is symptomatic of a dysfunctional disaster of NEO-Liberalism of depend capitalism is complex form time being.

    The so-called political-economic crisis but leaves TAXPAYERS to foot the true costs of CATASTROPE.

    All man-made and natural crisis fails in no alternative in effect nationalize all natural disasters that created a huge open-ended liability for the PEOPLE and Govt. of Sri Lankan by misrule of UNP Primer led govt.
    The very accountability misrule has taken over by MS-President and ex-President of CBK as well.

    And provide an important of governing clue as to just where the history economy of past by Ranil W… of UNP policies had its origins?

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