Sri Lanka

Sri Lanka: Market implications of political crisis

  • Cabinet resignation deepens political crisis and will further delay IMF talks and formulation of restructuring plan

  • New central bank governor will offer policy improvement but near-term reform prospects overshadowed by political drama

  • Default already inevitable, but political crisis could lead to higher exit yields and lower recovery values; retain Sell

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This report is independent investment research as contemplated by COBS 12.2 of the FCA Handbook and is a research recommendation under COBS 12.4 of the FCA Handbook. Where it is not technically a research recommendation because the subject of the research is not listed on any European exchange, it has nevertheless been treated as a research recommendation to ensure consistent treatment of all Tellimer's research. This report has been produced by the analyst(s) named above (the "Analyst").

The Analyst certifies that the views and forecasts expressed in this report accurately reflect their personal views about the subject, securities, or issuers specified herein. In addition, the Analyst certifies that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this report.

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