ZCZC
BCN-04
SRILANKA-ECONOMY-DEBT
Sri Lanka holds sovereign bond issues after downgrade
COLOMBO, Nov 23, 2018 (BSS/AFP) – Sri Lanka has abandoned plans to raise
money through sovereign bonds and will pursue badly-needed revenue elsewhere
after Moody’s downgraded its credit rating amid political turmoil, an
official said Thursday.
President Maithripala Sirisena’s economic advisor said “alternative
finance” raised locally would service much of Sri Lanka’s $4.5 billion in
foreign debt repayments in 2019.
Lalith Samarakoon said the credit downgrade by Moody’s on Tuesday would
result in higher borrowing costs for Sri Lanka in the international markets.
He said Sri Lanka would seek to extend a $1 billion loan from China by an
additional $500 million, but would only turn to international markets for
cash “as a last resort”.
“We have arranged certain other financing options such as raising $1
billion through state banks,” he said.
Moody’s said its decision was “exacerbated most recently by a political
crisis which seems likely to have a lasting impact on policy even if
ostensibly resolved quickly.”
The South Asian nation has been gripped by an unprecedented political
crisis since Sirisena sacked his prime minister on October 26 and appointed
former strongman Mahinda Rajapakse in his place.
Sirisena dissolved parliament and called snap elections on January 5 but
the legislature, restored by court order, voted twice to topple Rajapakse.
He has refused to step down, leaving Sri Lanka without a government since
November 15.
The unrest also prompted the International Monetary Fund to suspend a
tranche of a $1.5-billion bailout loan agreed to in 2016.
BSS/AFP/HR/0920