Dissanayake has vowed to reopen negotiations with the IMF over its $3 billion bailout, which comes with spending cuts and tax hikes that proved deeply unpopular with voters
Bloomberg
23 September, 2024, 10:50 am
Closing modified: 23 September, 2024, 10:56 am
Sri Lanka’s buck bonds and stocks slid as leftist candidate Anura Kumara Dissanayake’s victory at the presidential election puts the nation’s bailout by the Global Monetary Fund and debt presents at difficulty.
Bonds maturing in March 2029 declined 3.1 cents, the top seemingly tumble in about two years, to 50.2 cents on the buck on Monday. The S&P Sri Lanka 20 Index of blue-chip stocks slid 2% in early trading. The rupee traded precise.
Dissanayake has vowed to reopen negotiations with the IMF over its $3 billion bailout, which comes with spending cuts and tax hikes that proved deeply unpopular with voters.
“A Dissanayake gain is the worst conceivable for Sri Lanka’s bonds,” Tellimer strategists Hasnain Malik and Patrick Curran wrote in a tag Sunday.
Sri Lanka’s 2029 buck notes are place for a nearly 15% shuffle this quarter, a spectacular turnaround after handing merchants a return of shut to 70% remaining three hundred and sixty five days, one amongst the true in emerging markets.
It raises query marks no longer top seemingly for the IMF program however also whether or no longer a brand fresh administration would honour the agreement reached with creditors, with a risk that Dissanayake will compel creditors motivate to the negotiating desk, they wrote.
The nation remaining week reached an agreement in precept with bondholders to restructure about $12.6 billion in debt. Some contributors of Dissanayake’s National Of us’s Power coalition had adversarial the debt restructuring terms.
Market sentiment will count upon the fresh government’s actions when it comes to the economic system and debt negotiations, among different things, stated Navin Ratnayake, head of research at Colombo-essentially based fully John Keells Stock Brokers. Stocks possess mostly factored sooner or later outcome of the presidential election, he added.
