Fitch Affirms Sri Lanka at Restricted Default; Policy Uncertainty Following Elections

Fitch Ratings has affirmed Sri Lanka’s LongTerm Foreign-Currency Issuer Default Rating (IDR) at ‘RD’ (Restricted Default) and Long-Term Local-Currency IDR at ‘CCC-‘. Fitch typically does not assign Outlooks to issuers with a rating of ‘CCC+’ or below.

Sri Lanka’s September 2024 Presidential election was won by one of the opposition leaders.

“Fitch believes the result add uncertainty to the country’s policy direction and could lead to a delay in the completion of the foreign-currency debt restructuring or renegotiation of the IMF programme,” the agency said.

“The upcoming 2025 budget, to be adopted by November 2024, could offer clarity on the new government’s policies.”