Economics
Sri Lanka Credit Rating Cut by Moody’s as Looming Default to Bring Losses
- Government said last week it won’t service foreign debt
- Moody’s follows other rating firms in warning of default-to-be
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Sri Lanka is barreling toward a “series of defaults” as it stops paying its foreign debts, Moody’s Investors Service warned in a downgrade of the country’s credit rating.
The first default could come quite soon. The island nation was meant to pay about $78 million in interest to its bondholders on Monday -- until, of course, the government said last week it would halt foreign debt service to preserve cash for food and fuel imports. That has led rating companies to slash Sri Lanka further into junk, with Moody’s on Monday lowering its score to Ca from Caa2.