There is “real potential”of Sri Lanka defaults on its foreign debt- Fitch

Fitch, an international credit rating agency, has warned that there is “real potential”of Sri Lanka defaults on its foreign debt

Fitch issued the warning in its “What Investors Want to Know: Emerging-Market Sovereigns – 4Q21” report, “Investors Need to Know: Sovereign Liabilities-4Q21”, which is being released to educate investors about a number of countries around the world, including Sri Lanka.

Sri Lanka’s fiscal and external finances have been at a fragile level since November 2020, reaffirming our ‘CCC’ rating in June 2021 and showing significant credit risk, ”said Sagarika Chandra, Director, Fitch Ratings.

The report also states that Sri Lanka will have to repay the bulk of the foreign debt due in 2021 for projects and multilateral loans.

The report states that sovereign bond repayments will be $ 500 million and $ 1 billion in January and July 2022, respectively, and that Sri Lanka will continue to exclude borrowing from the International Monetary Fund.