13 Sri Lankan banks placed on Rating Watch Negative – Fitch

The National Long-Term Ratings of 13 Sri Lankan banks have been placed on Rating Watch Negative (RWN) by Fitch Ratings.

Announcing the ratings yesterday, Fitch said the RWN reflects heightened near-term downside risk stemming from constrained access to foreign-currency funding and the resulting indications of stress experienced by the banks in the system. 

This risk is exacerbated by the sovereign’s credit profile (Long-Term  Foreign-Currency Issuer Default Rating (IDR): CC, Long-Term Local-Currency IDR: CCC) and the ensuing risks to the stability of the financial system.

“We believe mounting currency stress increases the likelihood of restrictions being imposed on banks’ ability to service their obligations in foreign currency and the local currency in the event of a sovereign default, or prior, should confidence deteriorate,” Fitch said. 

–News Wire

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