Business Times

Sri Lanka expects upward revision in sovereign ratings

Sri Lanka expects an upward revision in sovereign ratings with favourable recommendations from officials from three major rating agencies who are expected to visit the island before the end of this month to review the current country rating.

They will hold meetings with Central Bank (CB) officials, politicians, financial experts, diplomats, foreign lending agencies, etc and report their findings to the rating committee, a senior CB official said.
CB Deputy Governor Dharma Dheerasinghe, who is also the head of the country’s high level Sovereign Rating Committee, told the Business Times that teams of analysts from Standard & Poor (S&P), Fitch and Moody would be visiting the island separately to prepare individual reports to review the ratings which will be forwarded to their top level committees to make the final decision.“The committee meetings will be held in London and New York in July and we are also visiting them to present our case,” he said.

The committee made up of top CB, Finance Ministry and private sector representatives had been appointed to develop a strategy to push Sri Lanka's sovereign rating to investment grade. It is charged with devising a strategy of taking Sri Lanka’s current speculative B+ (Fitch) and B (S&P) rating to an investment grade 'BBB-' or higher over the next four years. Dr. Dheerasinghe noted that "S&P may raise the ratings on Sri Lanka on evidence of more comprehensive fiscal or structural economic reforms”.

At the moment the country’s rating is B+ and “we hope that it will be upgraded by these committees based on the reports of these analysts,” he said adding that they expect an upgrade in the sovereign rating to minimum grade of BBB –or higher.

However an economic expert who wished to be anonymous told the Business Times that S&P may lower the rating if Sri Lanka deviates substantially from the IMF program’s framework, or if expectations on the recovery in growth prospects and revenue improvements disappoint."With inflation pressures mounting in Asia, Sri Lanka is ranked among countries that have lower risks of social unrest because of popular governments, higher growth and lower unemployment mitigating such risks caused by rising prices,” he revealed.

Last year Sri Lanka received a B1 sovereign rating from Moody’s with a stable outlook and officials are confident there would be an upgrade given the government’s improved fiscal performance for 2010, with the deficit reaching 7.9% of GDP, slightly lower than the 8 % target. S&P had given Sri Lanka a long term foreign currency rating of B+ and a long term local currency rating of BB-, both upward revisions from 2009. Fitch has affirmed Sri Lanka’s long term local and foreign currency issuer default rate at B+, revising the outlook from stable to positive.

Top to the page  |  E-mail  |  views[1]
SocialTwist Tell-a-Friend
 
Other Business Times Articles
Movable property as collateral against loans
Europe, developing world battle over IMF post
Sri Lanka expects upward revision in sovereign ratings
Grand Oriental Hotel deal to be finalised in two months
Some 7,000 GK depositors receive 2nd repayment
CB to further clarify bank loan-for-stocks rule
Tokyo bourse team to visit SL tomorrow
Showers of blessings
Comment - Dilemma of university teachers
Not more regulation but conformity with ILO Conventions and Workers’ Charter essential
TRC in preliminary round to ring in number portability
Right of Rreply - ‘Most investors in Sri Lanka trade on inside information’
Leading Indian cancer care provider seeks investor in Sri Lanka
Further extension of brokers’ credit stuns small investors
NDB 1Q11 YoY Group PAT doubles
CDB fosters IT literacy in remote Jaffna school
Discussion on Carbon crisis at ST Business Club
Correction - “Now it’s Rs 5 mln an acre for Kuchchaveli Investors”
Motivational speaker Craig Valentine talks leadership in Colombo
Investors cry foul over changing rules overnight
ICASL new headquarters, costing Rs 360 mln on 40,000 sq feet
Biggest GDP growth between 2004:08 came from price hikes, not real economic growth : economics teacher
Double digit revenue drop, after tax loss at former Watapota
First Capital 4Q10 group after tax profits double
BOC expands in India targeting businessmen, 60,000 Sri Lankan refugees
DIMO 12-month group revenues up 179%
Oil prices hit a snag sky high!
First quarter GDP growth within targets: Central Bank
Parquet to launch hyper market for building material
Kingslake software to increase productivity of tea exporters
Uva Wellasa University architect ends term after trail-blazing adventure in education
New SriLankan Airlines A320 touches down in Colombo
Janaki appointed to World Bank committee on agriculture finance
CB ‘figures’ on war and post war
Maldives pulls out of New7Wonders of nature contest
Behavioural Economics or Social Marketing? The Latter!
Maldives a ‘technology lab’ towards reducing carbon in the world

 

 
Reproduction of articles permitted when used without any alterations to contents and a link to the source page.
© Copyright 1996 - 2011 | Wijeya Newspapers Ltd.Colombo. Sri Lanka. All Rights Reserved | Site best viewed in IE ver 8.0 @ 1024 x 768 resolution