Sri Lanka sees sovereign credit upgrade and IMF bond projections

Sri Lanka is experiencing a shift in its credit landscape following Fitch Ratings' decision to upgrade the country’s sovereign Long-Term Local-Currency Issuer Default Rating from ‘CCC+’ to ‘B-’ with a stable outlook. This upgrade has prompted a recalibration of Fitch’s Sri Lanka National Rating Scale, which serves as a structural ceiling for domestic credit ratings. This reset allows local banks, finance companies, and corporate borrowers to be reassessed within a new national risk hierarchy.

Separately, the International Monetary Fund (IMF) projects that Sri Lanka could raise $3 billion through International Sovereign Bond issues by 2028, assuming $1.5 billion is raised in both 2027 and 2028. Finance and Planning Deputy Minister Dr. Anil Jayantha Fernando clarified to Parliament that these figures are IMF assumptions rather than official government projections. The government maintains that it will decide periodically whether to tap global markets based on assessed conditions.

Regarding short-term obligations, outstanding currency swaps totaled $4.1 billion at the end of May 2026, consisting of $1.8 billion in international and $2.3 billion in domestic swaps. The Public Debt Management Office is currently working to strengthen the regulatory framework for liability management to mitigate financing, interest rate, and currency risks.