Fitch Ratings has rated Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating at ‘Restricted Default’, or RD.
The Ratings Agency stated that the country’s reserve levels will influence the rating only once it has been moved out of ‘RD’.
Despite an increase in reserves over the last nine months to around USD3.8 billion in July 2023, they remain well below the USD7.3 billion average over 2014-2019, it added.
Fitch Ratings made the observation in a statement issued on the reserve dynamics among APAC sovereigns.
Reserve dynamics among APAC sovereigns appear to be diverging, with potential implications for their credit profiles, it said.
Stating that some central banks have been able to accumulate reserves on current account improvements or investment inflows, Fitch Ratings states that others still see their currencies under pressure from US Fed tightening prospects.
Full statement : https://www.fitchratings.com/research/sovereigns/reserve-trends-diverge-among-apac-sovereigns-07-09-2023 (NewsWire)