Fitch on Thursday downgraded Sri Lanka’s Long-Term local-currency debt rating by two notches to “CC” from “CCC”, citing a probable local-currency debt default n the face of high interest costs and tight domestic financing conditions.

The South Asian country is suffering its worst financial turmoil since independence from Britain in 1948 as a result of economic mismanagement, as well as the COVID-19 pandemic that wiped out the Indian Ocean island’s key tourism industry.

Sri Lanka aims to restore growth to pre-crisis levels in 2026, a state finance minister said on Wednesday, with policymakers intent on meeting a December deadline to present proposals that might help unlock an International Monetary Fund bail-out

Sri Lankan shares gain for fifth day as inflation eases

The ratings agency has affirmed Sri Lanka’s foreign currency debt rating at ‘RD’ or in default territory, reflecting the country’s worst economic crisis in decades.