Fitch Ratings has upgraded Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC+’, up from ‘RD’ (Restricted Default).
Typically, Fitch does not assign an Outlook to sovereigns with a rating of ‘CCC+’ or lower.
The agency has also upgraded Sri Lanka’s Local-Currency IDR to ‘CCC+’, from ‘CCC-‘, aligning it with the Long-Term Foreign-Currency IDR. This upgrade reflects a reduced risk of another default on local-currency debt, following the successful completion of international sovereign bond restructuring and improved macroeconomic indicators.
In September 2023, Sri Lanka completed the local-currency portion of its domestic debt optimization, which involved the exchange of treasury bills and provisional advances held by the Central Bank of Sri Lanka into new treasury bonds and bills.
