Amidst the political crisis in Sri Lanka, "Moody’s", an American business and financial services agency, rates Sri Lanka with a stable outlook at the lower level, influenced by the current situation found out to be worsening every day.
The Moody’s quoted, “External tightening has been exacerbated most recently by a political crisis which seems likely to have a lasting impact on policy even if ostensibly resolved quickly, have heightened refinancing risks beyond levels anticipated when the rating agency affirmed the rating at B1 with a negative outlook in July”.
Apparently, the rating for Sri Lanka has been downgraded from B1 to B2.
The agency points out that despite the current turmoil emerged in Sri Lanka they expect any future government may course on a firmness to implement fiscal, monetary and economic reforms that shall be strengthening the credit profile over the medium term. Their statement added that Moody’s projections include a slower pace of fiscal consolidation that assumed in July to reflect disruption to fiscal policy implementation in a period of political crisis.
However, Moody's assessment is that the Government's debt refinancing will remain highly vulnerable to sudden shifts in investor sentiment in a period of further tightening in financing conditions and political and policy uncertainty, with limited buffers to face such risk.
Only days ago it is learned that the International Monetary Fund (IMF) program for Sri Lanka was declined amidst the political crisis, and what is yet to come is in a greyer layer.