Sri Lanka central bank disputes S&P credit downgrade

Dec 15, 2008 (LBO) – Sri Lanka’s central bank has disputed a sovereign credit downgrade by Standard & Poors to ‘B’ from ‘B+’ saying it done without “proper assessment”. The Central Bank also said some comments in a media statement issued by the rating agency were “factually incorrect, logically untenable and grossly misleading.”

The central bank had issued a similar statements on earlier downgrades.

The full statement is reproduced below:

Standard & Poor’s has revised Sri Lanka’s Sovereign Rating without proper assessment of current developments and future outlook

The Standard & Poor’s Ratings Services (S&P) has issued a press release today downgrading Sri Lanka’s sovereign rating to ‘B’ from ‘B+’ citing certain concerns. However, many comments by S&P in their press release are factually incorrect, logically untenable and grossly misleading. Hence, the Sri Lankan authorities wish to make the following clarifications to get the record right.

Sri Lanka has experienced a decline in foreign exchange reserves in October and November 2008 due to the supply of foreign exchange to the market mainly to meet higher oil bill payments