Sri Lanka Bonds Set to Gain Most in Asia as Reserve Funds Sought
- S&P cut nation’s rating outlook on debt servicing concerns
- August rate increase may help shore up forex reserves
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Sri Lanka’s volatile dollar bonds are set to jump the most in Asia this month after its central bank unexpectedly raised interest rates earlier in August in a move that may help boost the country’s foreign exchange reserves.
But default concerns remain for the notes, with S&P Global Ratings last week cutting the outlook on its junk CCC+ ratings for the country to negative, citing risks that attempts to boost reserves may fall short of the government’s expectations.