Rating action by S&P unwarranted: CBSL

COLOMBO (News 1st); The Government of Sri Lanka (GOSL) is perturbed over the announcement by S&P Global Ratings to downgrade Sri Lanka, at a time when the GOSL has diligently lined up adequate funds to repay its maturing foreign debt liabilities and its repeated assurances over the strong commitment to oblige its debt service payments, including the International Sovereign Bond (ISB) maturing on 18 January 2022, the Central Bank of Sri Lanka (CBSL) states.

The credit rating agency, Standard & Poor’s (S&P) lowered long-term sovereign credit rating on Sri Lanka from ‘CCC+’ to ‘CCC’ on increasing external financing risks on Wednesday (12).The Central Bank of Sri Lanka, issuing a statement in response, states that this move demonstrates repetitive nature in which S&P and other rating agencies acted to initiate rating actions just prior to the settlement of ISB obligations.

S&P’s action also fails to recognize the positive developments taking place in Sri Lanka, in an environment in which the entire world is grappling with repeated waves of the COVID-19 pandemic, the CBSL states.The sense of urgency on the part of an internationally recognised rating agency is inconceivable, particularly since S&P was being constantly updated by the Sri Lankan authorities on the latest developments in all sectors of the economy and many measures to shore-up foreign exchange inflows.

In fact, these repeated rating actions, which have undermined and delayed the efforts of authorities’ to augment foreign exchange inflows, have negatively affected investor confidence, potential investment inflows and the gradual build-up of official reserves of the country.