Sri Lanka ‘B+’ rating confirmed, outlook raised to stable: Fitch

Sri Lankan President Maithripala Sirisena (L) and Sri Lankan Prime Minister Ranil Wickremasinghe gesture as Sri Lankan Finance Minister Ravi Karunanayake (unseen) presents a supplementary budget to parliament, marking the first economic policy statement of the new government which came to power earlier in the month in Colombo on January 29, 2015. Sri Lanka's new government announced hefty taxes on top companies in a bid to raise revenue, accusing the previous regime of fudging the figures and leaving the economy in a "sad state". AFP PHOTO / Ishara S. KODIKARA (Photo credit should read Ishara S.KODIKARA/AFP/Getty Images)

Oct 09, 2009(LBO) – Fitch Ratings said it has lifted the outlook on Sri Lanka’s ‘B+’ sovereign rating to ‘stable’ from ‘negative’ on the end of a war and a deal with the International Monetary Fund that has boosted foreign reserves. At the same time, the agency said in a statement it has confirmed the long-term foreign and local currency IDRs and the country ceiling at ‘B+’, and the short-term IDR at ‘B’.

“The revision to Sri Lanka’s Outlook reflects positive changes in sovereign credit fundamentals following the end of the 26-year civil war, the approval of a 2.6 billion dollar IMF agreement and the return of private sector capital inflows,” said James McCormack, Head of Asia Sovereigns at Fitch.

“Official foreign exchange reserves were 4.3 billion dollars at end-September, which is a record high, and are expected to exceed five billion dollars by year-end, providing a substantial lift to the sovereign’s external financial position,” McCormack said.

Fitch said it believes there is a real opportunity for economic renewal as part of the post-war transformation of Sri Lanka.

“The agency believes that, with the fighting having ended, it is much more likely that a durable political consensus can be reached on consti