Moody’s ratings unwarranted - Finance Ministry | Sunday Observer

Moody’s ratings unwarranted - Finance Ministry

4 October, 2020

Responding to the recent downgrading of Sri Lanka’s ratings by Moody’s the Finance Ministry issuing a media release on Tuesday stated the observation by the rating agency was unwarranted at a time when the budget for 2021 is to be presented by the government which would lay out the policy framework in the medium term.

The rating agency downgraded Sri Lanka’s long term foreign currency issuer and senior unsecured ratings to Caa1 from B2. However, the outlook remained stable according to the rating agency.

“We observe, with disappointment, today’s rating downgrade by Moody’s Investors Service and the recent release of an erroneous analysis by an international investment bank expressing concerns about Sri Lanka’s economic and financial strength and external debt service capacity,” the Finance Ministry stated.

It further noted the downgrade and the report fail to do justice to the ground reality of the ongoing rapid economic recovery backed by vastly improved business confidence arising from the return of political and policy stability after a lapse of five years.

“All payment transactions for the repayment of the International Sovereign Bond of US dollars 1 billion maturing on October 4, 2020 have already been lined up and funds will be credited to the paying agent’s account on October 2, 2020. Foreign investors are invited not to be dissuaded by the recent unwarranted rating downgrade and the erroneous analysis published recklessly, but to be guided by the improving economic conditions,” the release stated.