In a fresh development indicating positive signs of Sri Lanka's economic recovery, S&P Global Ratings has upgraded the country's long- and short-term local currency sovereign credit ratings from 'SD/SD' (selective default) to 'CCC+/C'.

S&P Global Ratings made this announcement, citing key factors contributing to this improvement in Sri Lanka's creditworthiness. On September 14, 2023, Sri Lanka successfully settled a debt exchange program, specifically targeting its local-currency-denominated government bonds held by superannuation funds. Additionally, on September 21, 2023, the Sri Lankan government concluded a successful restructuring of its obligations to the Central Bank of Sri Lanka.

S&P Global Ratings emphasized their forward-looking assessment of Sri Lanka's creditworthiness concerning local currency obligations post-default, which has led to the rating upgrade. This decision reflects growing confidence in Sri Lanka's ability to navigate its economic challenges and meet its financial commitments.

As a result of this adjustment, Sri Lanka's long- and short-term local currency sovereign credit ratings now stand at 'CCC+/C', while the foreign currency ratings remain at 'SD/SD' (selective default). The stable outlook assigned to the 'CCC+' long-term local currency rating signals optimism about the country's economic prospects in the coming period.