Following the announcement by Fitch Ratings downgrading Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'CCC', the Ministry of Finance has responded saying that the rating action is based on uncorroborated facts sans due consideration given to recent economic and policy developments.
“Government has rejected to accept this downgrade as it fails to recognise the robust policy framework of the present administration for addressing the legacy issues, including the concerns raised by Fitch Ratings.
It has ensured ongoing economic recovery and macroeconomic stability of the Country," the Finance Ministry said in a statement.
We observe, with disappointment, today’s rating action by Fitch Ratings expressing concerns about Sri Lanka’s external debt repayment capacity over the medium-term, financing options and debt sustainability risks.
These measures were taken, at a time when the newly appointed Government has just announced its medium term policy framework in its Budget 2020.
This downgrade by Fitch fails to recognise the robust policy framework of the new Government for addressing the legacy issues, including the concerns raised by the Ratings agency, and ensuring ongoing economic recovery and macroeconomic stability of the Country.
It is surprising to note that Fitch Ratings’ assessment has ignored several key proposals presented in the Government Budget 2021 with regard to deficit financing in the period ahead, Finance Ministry said.
As indicated in the Budget 2021, the Government has adopted a novel approach in relation to foreign financing while enhancing the effectiveness of already secured financing channels, aimed at reducing the share of foreign financing of the budget deficit over the medium term
(LIN)