Fitch Ratings said yesterday it will recalibrate the Sri Lankan National Rating scale to reflect changes in the relative creditworthiness among Sri Lankan issuers following the downgrade of the country’s sovereign rating to ‘B’ from ‘B+’ on December 3, 2018.
The recalibration will result in rating actions for some issuers with Sri Lankan national ratings. We anticipate a reduction in the number of ‘AAA(lka)’ rated issuers after the recalibration exercise is finalised, expected by end-February 2019, as a result of the sovereigndowngrade and the resultant changes to the relative ranking of credits in the country.
National scale ratings are a risk ranking of issuers in a particular market designed to help local investors differentiate risk. Sri Lanka’s national scale ratings are denoted by the unique identifier ‘(lka)’. Fitch adds this identifier to reflect the unique nature of the Sri Lankan national scale. National scales are not comparable with Fitch’s international ratings scales or with other countries’ national rating scales.
Meanwhile, IMF team is scheduled to visit Colombo in mid-February to resume program discussions.
IMF Managing Director Christine Lagarde on Meeting with Sri Lanka’s Finance Minister Mangala Samaraweera and Governor Indrajit Coomaraswamy on January 15 said in a statement “The IMF remains ready to support the Sri Lankan authorities in these endeavours.”
IMF had discussions with Sri Lankan officials on a range of economic issues including the challenging economic environment and the policy priorities for the country.
The authorities stressed Sri Lanka’s continued commitment to their economic reform agenda under the IMF-supported program. And the agreed ‘that a strong policy mix, with effective implementation of that agenda, is key to strengthening confidence, while putting Sri Lanka on a sustainable, high-quality growth path that would benefit its people.’
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