Lankapage Logo CP 17 YEARS
Go Home Home Serving the Sri Lankan community globally since 2000
go to LankaPage.com

Leading News from Sri Lanka::

* Sri Lanka rating upgrade depends on meeting IMF conditions, Fitch says
Tue, Jan 10, 2017, 10:50 am SL Time, ColomboPage News Desk, Sri Lanka.

Jan 10, Colombo: Potential improvements in credit profiles of sovereigns like Sri Lanka which have received assistance form International Monetary Fund (IMF) will depend on the country's level of compliance with IMF conditions, as implementation risks are often high, Fitch Ratings said.

Support from the IMF has helped to mitigate external liquidity risks and reduced the medium-term default risks in several frontier markets that entered into new programs in 2016, Fitch Ratings said in a statement.

In the two years leading up to their IMF loans, Fitch took negative rating action on five countries including Sri Lanka out of the eight sovereigns that entered Standby Arrangements or Extended Fund Facilities in 2016.

Fitch Ratings said that a lack of currency flexibility was also a factor in pushing some frontier markets into IMF agreements. Egypt, Sri Lanka and Suriname all ran down foreign-exchange reserves at unsustainable rates trying to resist currency depreciation in a global environment of US dollar strength.

"However, they have allowed more flexibility since beginning discussions with the IMF, which has helped reduce pressure on their external balance sheets," Fitch said.

The rating agency noted that IMF loans should alleviate external liquidity pressures and reduce the risk of sovereign default, particularly where IMF assistance has been supported by other multilateral assistance or has improved access to global bond markets.

However, all of these countries according to Fitch, still have either large current-account or fiscal deficits, or both.

"Reducing these vulnerabilities will be key to stabilizing or improving their ratings," the rating agency advised.

 


ColomboPage - Recent 10 Stories ::
Indian handcraft exhibition in Colombo provide a platform for Sri Lankan artisans
-- [5 hours ago]
Sri Lanka Foreign Ministry complains to CID about fake twitter account of Minister
-- [5 hours ago]
Human Rights Commission recommends measures to address Salawa explosion victims' complaints
-- [7 hours ago]
Sri Lanka police looking to arrest extremist Buddhist monk
Sri Lanka police arrest Army brigadier commanded the Rathupaswala shooting
Sri Lanka tea features prominently at the United Nations in New York
Health Minister highlights Sri Lanka's health achievements at 70th World Health Assembly
Sri Lanka's Disaster Management Center warns of flooding of rivers in low lying areas as heavy rains continue
Sri Lankan President and Australian PM agree to enhance bilateral cooperation
Sri Lanka Police and law enforcement authorities ordered to take prompt legal action against hate crimes

Copyright © 2000, 2016 by LankaPage.com (LLC) :
The news and other contents on ColomboPage are copyrighted property of LankaPage.com, LLC. Any unauthorized use of any information on ColomboPage may constitute a violation of copyright laws. You need written permission to reproduce, republish, post, transmit, broadcast or distribute, material from this site from LankaPage.com, LLC. However, news organizations or broadcasters in Sri Lanka may republish the news items in ColomboPage with proper acknowledgment to ColomboPage.