Sajith says Moody’s downgrade will deal severe blow to economy

Wednesday, 7 October 2020 00:50 - - {{hitsCtrl.values.hits}}

States country in midst of severe financial crisis
Says SL will be hard-pressed to service its huge foreign debt

Opposition Leader Sajith Premadasa, in a special statement to Parliament yesterday, said the country was in the midst of a severe financial crisis and that the recent downgrading of the country by Moody’s Investors Service would deal a severe blow to the economy.

“This downgrading would have a severe blow for the economy which needs an infusion of around $ 4 billion between 2020 and 2025. As of August, our foreign reserves were at $ 7.4 million. In that context, the Government repaid a $ 1 billion international sovereign bond (ISB). That is not a move favourable for the country’s economy,” Premadasa said.

He said that Moody's downgrade of the country’s sovereign credit rating by two notches from ‘B2’ (high credit risk) to ‘CAA1’ (very high credit risk) had put the country in the company of countries such as Angola, Mali, Barbados, Gabon, and Iraq.

Premadasa said that the need of the hour was urgent economic reforms through collective efforts and that the country would be hard-pressed to secure funding to service its huge foreign debt.

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