Sri Lanka sovereign rating outlook lowered by S&P

Feb 29, 2012 (LBO) - Standard & Poor's Ratings Services has lowered its outlook on Sri Lanka's 'B+' long-term foreign currency sovereign credit rating to stable from positive because of falling foreign reserves and fiscal problems. The rating agency at the same time downgraded Sri Lanka's long-term local currency rating to 'B+' from 'BB-', while affirming the 'B' short-term local currency rating.

Sri Lanka's B+ foreign currency rating has been confirmed.

S & P has confirmed Sri Lanka's B+ foreign currency rating.

A statement from S&P said the stable outlook reflects Sri Lanka's strong growth prospects but that high debt levels and budget deficits remain concerns.

"Sri Lanka's reserves have fallen to three months coverage of its current account payments as of end-2011 from roughly four months in the middle of 2011," S&P said.

"Given the lower reserves and continued fiscal pressures, we are revising the outlook on our 'B+' long-term foreign currency sovereign rating on Sri Lanka to stable from positive.

"We are equalizing our long-term local currency sovereign rating with the foreign currency sovereign rating at 'B+'. The outlook is stable," it said.

"We are affirming our 'B+' long-term foreign cu