Amid political turmoil, Sri Lanka has now abandoned the plans to raise money through sovereign bonds on Thursday, as the Moody’s has downgraded its credit rating structure to Sri Lanka.
President Maithripala Sirisena’s economic advisor referred to “alternative finance” to process foreign debt repayment in 2019 of about Sri Lanka’s $4.5 billion, and said it will help in locally raising the funds.
Lalith Samarakoon stated that for Sri Lanka in the international markets, the credit downgrade by Moody’s would somehow result in higher borrowing costs.
He also said that Sri Lanka is looking forward to seek $1 billion loan from China by extending an additional $500 million, but ultimately it would turn into ‘as a last resort’ for cash in terms of international market.
Samarkoon said, “We have arranged certain other financing options such as raising $1 billion through state banks.” He further said that his decision was of “exacerbated most recently by a political crisis which seems likely to have a lasting impact on policy even if ostensibly resolved quickly”.