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Sri Lanka hit with another downgrade as crisis worsens

Standard and Poor’s has hit Colombo with yet another credit rating downgrade, from ‘CCC+’ to ‘CCC’, stating that Sri Lanka’s “external position continues to weaken owing to elevated external obligations and uneven access to financing”.

The latest downgrade comes in the midst of a financial crisis on the island, which has seen foreign reserves drop and the cost of basic goods skyrocket.

“Foreign exchange resources will be further pressured over the coming quarters by additional external sovereign debt maturities and current account requirements,” the S&P said.

“These developments indicate a rising probability of sovereign default scenarios playing out over the next 12 months in the absence of an unforeseen positive development.”

“The negative outlook reflects our expectation that Sri Lanka’s external financial position will deteriorate further over the coming quarters.

“This would affect Sri Lanka’s ability to service its debt over the next 12 months.”

See more from EconomyNext here.

Also see more from the BBC: How the soaring cost of living is hitting Sri Lankans hard

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