Sovereign Analysis /
Sri Lanka

Sri Lanka: Good and bad news for bonds

  • Deficit monetisation increased sharply in September, but is likely to drop in October amid reduced financing shortfalls

  • New financing increases the chance that the 2022 eurobonds will be paid but does not lower default risk beyond mid-2022

  • We maintain Hold on January 22s. No rating on July 22s. Sell on the rest of the eurobond curve after the recent rally

Sri Lanka: Good and bad news for bonds
Patrick Curran
Tellimer Research
5 November 2021
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