The S&P, on 15 December 2008, downgraded Sri Lanka’s sovereign rating to ‘B’ from ‘B+’ mainly citing the deterioration of the external liquidity position while raising the outlook to “stable”. However, the outlook was changed subsequently to “negative” on 21 May 2009, a decision many considered arbitrary, as that move was taken by S&P a few days after the end of the 26 year old internal conflict. Positive response by international investors after the end of the conflict confirmed the fact that investors ignored the arbitrary move by S&P to downgrade Sri Lanka’s outlook.