Moody's says political crisis credit negative for Sri Lanka

[The Invisible]

ECONOMYNEXT - Moody's Investors Service, a rating agency said Sri Lanka's political crisis is credit negative and the sudden appointment of Mahinda Rajapaksa as Prime Minister has increased uncertainty.

"The current political crisis in Sri Lanka is credit negative for the sovereign," Matthew Circosta, Analyst, Sovereign Risk Group, Moody’s Investors Service said in a statement.

"The President’s sudden appointment of Mr Rajapaksa as Prime Minister significantly heightens policy uncertainty."

"Additionally, the possible social tensions that may unfold in the next few weeks would have a negative impact on the economy, which is already growing slowly.

"And at a time when global financial markets are turbulent, uncertainty about the direction of future policy could have a large and lasting negative impact on international investor confidence.

"Such a development would undermine Sri Lanka’s ability to refinance forthcoming external debt in early 2019 at affordable costs."