📈 Sri Lanka Targets Early Capital Market Access Post-Fitch Upgrade

• Macroeconomic & Market Outlook Following Fitch Ratings' upgrade of Sri Lanka to 'B-' (Stable Outlook) from 'CCC+', Standard Chartered CEO Bingumal Thewarathanthri suggested entering global capital markets before the IMF Extended Fund Facility (EFF) program ends in 2027. However, he cautioned against aggressive debt creation to avoid past vulnerabilities. IMF assumptions and Fitch both project market re-entry around 2027. • Bond & Equity Performance Restructured 2036 and 2038 sovereign bonds reached record highs of ~103 cents on the dollar, emerging among top global performers. Domestic markets gained as the ASPI rose 74.83 points to 21,054.01 and the S&P SL20 grew by 0.70%. • Key Economic Metrics & Fiscal Constraints Fitch projects foreign exchange reserves at US$ 7.7 Bn (2.9 months of imports) by end-2026. The interest-to-revenue ratio is forecasted to ease to 41% in 2026, though still significantly above the 'B' median of 12.7%. • Sector & Structural Reforms CBSL Governor Dr. Nandalal Weerasinghe highlighted a shift from stabilization to long-term productivity and investment. Highlights include: • Sustainable Finance: Implementation of the National Climate Finance Strategy (2025–2030) and Sustainable Finance Roadmap 2.0 (2025–2029) to issue green, blue, and sustainability-linked bonds. • Tourism & Digital Payments: LANKAQR integration with international payment platforms including UPI, UnionPay, Alipay+, WeChat Pay, and NepalPay to boost tourist spending.