Sri Lanka is unable to repay its foreign debt – Fitch Ratings warns


Sri Lanka is currently facing a major foreign reserves crisis, which could escalate further by 2023, according to the International Fitch Ratings. The agency warns that in this situation there is a real possibility that Sri Lanka will default on its foreign debt.

This is described by the report What Investors Want to Know: Emerging-Market Sovereigns – 4Q21, which was released to educate investors about many countries around the world, including Sri Lanka.

According to Fitch Ratings, Sri Lanka’s public and external finances have been on a downward spiral since November 2020, which has forced Sri Lanka to downgrade to the CCC category. The report states that the downgrade has been confirmed.

The report further states that US $ 500 million in sovereign bonds are due to be repaid in January 2022 and US $ 1 billion in July, and Sri Lanka’s foreign reserves will fall to US $ 2.5 billion by 2023.

According to Fitch Ratings, Sri Lanka will continue to face serious risks in the future as the Sri Lankan government continues to refuse to go to the International Monetary Fund.

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