Fitch Ratings, a leading provider of credit ratings, commentary and research for global capital markets, today said debt default was a "real possibility for Sri Lanka"

"Sri Lanka's public and external finances remain fragile, as reflected in our 'CCC' rating in place since November 2020 and affirmed in June 2021. A rating at this level indicates substantial credit risk, with default 'a real possibility,' " Fitch said.

Fitch has projected the country's foreign exchange reserves to plummet to USD 2.5 billion by 2023, down from the USD 3.5 billion in August 2021, following a grant received through the International Monetary Fund's special drawing rights to the tune of USD 780 million.

"Although authorities have outlined plans to secure funds through bilateral, multilateral and other syndicated loans, the financing plans contained limited details, including the sources and timelines of financing arrangements," Fitch said referring to the 06-month roadmap recently released by the Central Bank of Sri Lanka.