Sri Lanka is most at risk of an exchange rate crisis, according to a gauge published by Nomura this week, as fears over currency crunches continue to build in emerging market economics.
Nomura’s “Damocles” index, which the bank called an “early warning system”, placed Sri Lanka most at risk out a range of market economies, reports the Financial Times.
Sri Lanka’s poor outlook is “due to still-weak fiscal finances and a very fragile external position,” Nomura analysts said. “With [foreign exchange] reserves of less than five months of import cover and high short-term external debt ($160bn), its refinancing needs are large. Political stability also remains an issue.”
See more from the Financial Times here.