Current political crisis in Sri Lanka is credit negative for sovereign: Moody’s

Oct 29, 2018 (LBO) – Moody’s says the current political crisis in Sri Lanka is credit negative for the sovereign and the President’s sudden appointment of Mahinda Rajapaksa as Prime Minister significantly heightens policy uncertainty.

Issuing a statement, Matthew Circosta of Moody’s Investors Service said the possible social tensions that may unfold in the next few weeks would have a negative impact on the economy, which is already growing slowly.

“And at a time when global financial markets are turbulent, uncertainty about the direction of future policy could have a large and lasting negative impact on international investor confidence,” Circosta said.

“Such a development would undermine Sri Lanka’s ability to refinance forthcoming external debt in early 2019 at affordable costs.”

Government of Sri Lanka - Political crisis throws up policy uncertainty, could undermine growth, external financing, a credit negative