Three international rating agencies; Standard & Poor’s (S&P), Fitch Ratings and Moody’s Investors Service recently upgraded Sri Lanka’s sovereign credit rating.

On 14 September, Standard & Poor’s (S&P) upgraded Sri Lanka’s long-term foreign currency sovereign credit rating to B+ and the long term local currency rating to BB- with a stable outlook.

On 21 September, Fitch Ratings affirmed Sri Lanka’s long term foreign and local currency Issuer Default Ratings (IDR) at B+ while upgrading the outlook to “Positive”.

On 22 September 2010, Moody’s Investors Service assigned a B1 foreign currency issuer rating with a stable outlook, the Central Bank said.

Accordingly, the current sovereign ratings of the country stand as follows:

Given the many positive developments in the country during the post-conflict period, these rating upgrades have been expected, the Central Bank stated.

The improved macroeconomic fundamentals, prudent monetary policy, fiscal consolidation, planned structural improvements of the economy, and high economic growth prospects will further support the enhancement of Sri Lanka’s sovereign credit rating in the near to medium term.

These upgrades could be viewed as an outcome of the strategy towards upgrading Sri Lanka’s sovereign rating over the medium term. For this purpose the CBSL recently appointed a high level Sovereign Rating Committee (SRC), comprising senior officials of the Ministry of Finance and Planning (MOFP), CBSL, and some private sector leaders. The SRC has been assigned to make regular reviews on the developments of the economy and have negotiations with the rating agencies through Rating Advisors towards upgrading the country’s sovereign rating.