Fitch Ratings has affirmed Sri Lanka’s long-term foreign-currency issuer default rating at CCC. It said the island nation’s CCC rating reflects a challenging foreign-currency sovereign external debt repayment burden over the medium term, low foreign exchange reserves and rising government debt that gives rise to sustainability risks. Nevertheless, said Fitch, Sri Lanka’s medium-term debt service challenges are substantial and pose risks to the sovereign’s debt repayment capacity. A total of about USD29 billion in foreign currency debt obligations are due between now and 2026 against foreign exchange reserves of USD4.5 billion as of end-April. Fitch projected Sri Lanka’s foreign exchange reserves to remain at about USD 4.5 billion by end-2021 before declining to USD3.9 billion by end-2022.

Source: The Nation June 16, 2021 16:30 UTC