Economics
Sri Lanka Slashed By Fitch as Sovereign Default ‘Has Begun’
- Earlier S&P cut nation to CC, warned of further cut to SD
- Government on Tuesday said it would stop paying foreign debt
Residents queue for liquefied petroleum gas in Colombo, Sri Lanka, on April 12.
Photographer: Jonathan Wijayaratne/BloombergThis article is for subscribers only.
Sri Lanka was downgraded deeper into junk by Fitch Ratings, which said the nation’s decision to suspend payments on its foreign debt has kicked off a sovereign default process.
Fitch Ratings downgraded the nation’s long-term foreign currency to C, one step above default. Earlier, S&P also cut the country’s score to CC, the third-lowest level. The decisions come amid widespread social and political unrest, which led the government on Tuesday to announce it will no longer service its external debts to conserve foreign currency for crucial imports, such as food and fuel.