Sovereign Analysis /
Sri Lanka

Plummeting reserves push Sri Lanka closer to default

  • Reserves dropped by nearly US$1bn in September to just US$2.6bn as Sri Lanka's BOP crisis continues to worsen

  • The central bank's reform roadmap fails to address underlying problems and will be insufficient to stave off a crisis

  • Default is inevitable beyond Q1 22 absent a major policy shift; maintain Sell on eurobonds beyond January 2022 maturity

Plummeting reserves push Sri Lanka closer to default
Patrick Curran
Tellimer Research
8 October 2021
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