Business

US trade war poses risks to Sri Lanka’s creditworthiness, warns Fitch

Published

1 year ago

2025/04/18

Thilina Walpola

Meanwhile, tensions between the world’s two largest economies remain high

By Sanath Nanayakkare

Sri Lanka’s already vulnerable financial position could be further threatened by the ongoing US trade war, according to a recent analysis by Fitch Ratings.

The global ratings agency highlights that Sri Lanka, currently rated CCC+, is particularly susceptible to negative impacts if its export earnings are hit by the escalating tariffs.

Fitch Ratings, Hong Kong, in a press release issued on April 15, 2025, warned that increasing US tariffs would weigh on the credit metrics of many sovereigns in the Asia-Pacific (APAC) region. The report emphasised that APAC’s high trade openness and reliance on US demand make it especially vulnerable to the fallout from the trade war.

While the 10% tariffs imposed by the US on most countries are slightly below Fitch’s earlier projections, the agency believes that Asian economic growth will slow as exports and export-oriented investments suffer from tariffs and increased uncertainty.

“This slowdown, coupled with weaker commodity prices and exchange rate adjustments, will affect APAC sovereigns to varying degrees. Several economies in the region, including China, Vietnam, Taiwan, Thailand, and Korea, rely heavily on manufacturing exports and investments, with the US serving as a major export market. These economies could face significant challenges as a result of the trade war,” it stated.

Fitch noted that government policy responses would be crucial in determining the ultimate impact on APAC sovereign ratings. While some higher-rated jurisdictions like China, Singapore, and Taiwan may have the fiscal space to implement stimulus measures, some others, including Sri Lanka, have limited headroom due to high debt levels and constrained fiscal consolidation since the pandemic and its own economic crisis.

The ratings agency also cautioned that the US dollar could appreciate against some APAC currencies, potentially increasing debt burdens for countries with a large share of foreign-currency debt. Furthermore, foreign-exchange reserves could shrink if authorities intervene to support their currencies, further straining economies with low external buffers like Sri Lanka.

Fitch concluded that countries with relatively low external buffers, such as Bangladesh and Sri Lanka, were particularly at risk if their export earnings were negatively impacted by the tariffs.

Meanwhile, tensions between the world’s two largest economies remain high.

After the White House website claimed that imports from China to the US would face tariffs of up to 245 percent, the Chinese Foreign Ministry warned yesterday that China would pay no attention to the US’s further tariff numbers game, and it would take ‘resolute countermeasures’ and ‘fight to the end’ if Washington persisted in substantially infringing on China’s rights and interests.

China Daily – the ruling Chinese Communist party’s English-language mouthpiece published a sharply worded editorial on April 15, rejecting U.S. President Trump’s repeated claims that the US had been ‘ripped off’ by China.

“The U.S. is not getting ripped off by anybody. It is taking a free ride on the globalisation train and is living beyond its means,” China Daily argued.

All News Advertisement

Business

Commercial Bank extends its operations to Port City Colombo

Published

2 mins ago

2026/06/8

Thilina Walpola

The Commercial Bank branch at Port City Colombo.

Commercial Bank of Ceylon PLC’s new branch in Port City Colombo is poised to bring world-class banking services to Sri Lanka’s emerging international financial hub.

Located at Building 04 in Area 02 of the Port City Business Centre – Commercial Hub, Commercial Bank’s Port City Colombo branch will function as a fully-fledged banking operation, strengthening the Bank’s presence in one of Sri Lanka’s most strategically significant emerging economic zones. Designed to serve the evolving financial requirements of corporates, investors, businesses, professionals and retail customers within the Port City Colombo ecosystem, the branch offers access to Commercial Bank’s comprehensive portfolio of financial solutions. These include current and savings accounts, fixed deposits, personal and business lending, housing and leasing facilities, credit and debit card services, inward and outward remittances, foreign currency accounts and transactions, trade finance solutions, import and export services, corporate banking, treasury and foreign exchange services, cash management solutions and digital banking facilities.

By combining full-service branch banking with digital capabilities and uninterrupted self-service access, the new branch reflects Commercial Bank’s commitment to delivering future-ready, accessible and internationally aligned financial services in support of Port City Colombo’s growth as a dynamic hub for commerce, investment and innovation.

Business

Credit card interest rates to increase from July 1

Published

2 mins ago

2026/06/8

Thilina Walpola

Following the recent decision by the Monetary Policy Board of the Central Bank of Sri Lanka to raise the Overnight Policy Rate by 100 basis points, a corresponding increase in market interest rates has been reported.

In line with this shift, several banks have already taken steps to increase the interest rates charged on credit cards. Banks have begun notifying their customers that the annual interest rate for credit cards will rise from the current 26% to 28%, effective from July 1st.

This rate hike comes at a time when credit card usage is on the rise. According to the Central Bank of Sri Lanka, the total number of active credit cards in the country stood at 2,166,186 at the end of 2025. By the end of the first quarter of 2026, this number had grown to 2,215,853 cards.

The latest data also highlights a significant increase in consumer debt. The total outstanding balance on credit cards was Rs. 189,706 million as of December 31, 2025. By March 31, 2026, this figure had climbed to Rs. 194,105 million, reflecting a growing reliance on credit despite the looming interest rate adjustments.

Business

Hayleys Mobility launches JAECOO J5 HEV, expanding Sri Lanka’s premium Hybrid SUV segment

Published

2 mins ago

2026/06/8

Thilina Walpola

From left to right) Sujith De Alwis – Executive Director / Chief Executive Officer, Hayleys Fentons Limited, Hasith Prematillake – Managing Director, Hayleys Fentons Limited, Rajieve Fernando – Chief Executive Officer, Hayleys Mobility Limited and Roshani Dharmaratne – Executive Director, Hayleys Mobility Limited; with the newly unveiled JAECOO J5 HEV.

Hayleys Mobility Limited, the mobility arm of Hayleys Fentons Limited, has introduced the all-new JAECOO J5 HEV to Sri Lanka, strengthening its presence in the country’s growing new-energy vehicle market. Designed for modern drivers, this hybrid SUV blends intelligent performance, advanced safety, and premium comfort for both city driving and long-distance travel.

The JAECOO J5 HEV is powered by a 1.5L Turbo GDI engine paired with an electric motor and Dedicated Hybrid Transmission (DHT), delivering a combined 221 hp and 295 Nm of torque. It accelerates from 0–100 km/h in 7.9 seconds and achieves fuel efficiency of 18.9 km per liter, with a total driving range exceeding 950 km on a full tank—reducing both fuel stops and operating costs.

The vehicle features a bold exterior with a sharp LED lighting signature, while the interior offers a refined cabin with intuitive technology and modern connectivity. A comprehensive suite of advanced safety and intelligent driving technologies enhances driver confidence.

Company leaders emphasized Hayleys’ commitment to future-oriented mobility. The J5 HEV is backed by a 7-year vehicle warranty, an 8-year battery warranty, and the trusted after-sales network of Hayleys Mobility.

Priced at LKR 19.9 million, the JAECOO J5 HEV is available at Hayleys showrooms, including the OMODA & JAECOO flagship store in Colombo. An introductory discount of LKR 1 million is being offered to the first 100 customers, making next-generation hybrid mobility more accessible.