S&P upgrades Sri Lanka’s ratings outlook to stable

November 23, 2017

COLOMBO - S&P Global Ratings has revised its outlook on Sri Lanka to stable from negative, while affirming its 'B+' long-term and 'B' short-term sovereign credit ratings. The transfer and convertibility risk assessment on Sri Lanka is unchanged at 'B+'.

S&P says the stable outlook reflects its expectation that the Government will maintain the reform momentum over the next 12 months and smooth the upcoming surge in debt redemptions, particularly in 2019.
“Downward pressure on the rating could materialise if the political environment were to become more fractious, derailing the legislative programme, especially its liability management reform,” S&P says.
“A higher rating is unlikely in the next 12 months, but upward pressure could coalesce if Sri Lanka's external and fiscal indicators show dramatic improvement.
“Upside pressure could also materialise if we conclude that there has been a substantive improvement in Sri Lanka's institutional settings, including a continued strengthening of monetary policy credibility and independence at the central bank. www.standardandpoors.com (ATI).