Sri Lanka hits back at Moody’s Investors Service

• Says Moody’s action could create uncertainty among investors

Hours after the Moody’s Investors Service has placed Sri Lanka’s rating ‘under review for downgrade,” the government yesterday hit back at the Moody’s Investors Service, stating that unwarranted announcement by Moody’s reemphasizes the need for the Sri Lankan Government to revisit its relationship with rating agencies.

Issuing a statement by the Finance Ministry, the government said that it was surprised over the announcement by Moody’s Investors Service,“at a time when the GOSL has diligently lined up adequate funds to repay its maturing foreign debt liabilities, including the International Sovereign Bond (ISB) maturing at end July 2021.”

“Moody’s has placed Sri Lanka’s rating ‘under review for downgrade,” although this does not imply a downgrade. However, Moody’s action could create uncertainty among investors who have kept faith in Sri Lankan ISBS and other investments,” the ministry said.

However, the statement said that the GOSL has taken all measures to repay the upcoming ISB maturity of US dollars 1,000 million due in end July 2021.”

“The Sri Lankan economy has shown strong signs of broad based recovery, with a real GDP growth of 4.3 per cent in the first quarter 2021. The domestic vaccination drive is continuing at full force, providing confidence of a continued improvement in economy activity, combined with a possible strong rebound of the tourism sector,” it said.