Fitch Ratings has upgraded Sri Lanka’s Long-Term Issuer Default Ratings (IDRs) to ‘B-’ from ‘CCC+’ and assigned the country a Stable Outlook.

According to Fitch, the upgrade is driven by the implementation of macro-stabilization policies supported by structural reforms that have reduced external financing risks and strengthened the country’s ability to withstand economic shocks.

The ratings agency noted that the improvement is reflected in substantial gains in Sri Lanka’s fiscal and external balances, as well as the gradual rebuilding of foreign exchange reserves.

Fitch stated that continued fiscal discipline and efforts to improve government revenue collection are expected to support sustained primary budget surpluses, helping to place the country’s debt burden on a downward trajectory while reducing the risk of a return to external imbalances.

Despite the upgrade, Fitch cautioned that Sri Lanka continues to face several challenges.

The agency pointed out that the country’s credit profile remains constrained by government debt-to-GDP levels and debt servicing obligations that remain significantly higher than those of many similarly rated countries, even after recent debt restructuring and macroeconomic adjustments.

Sri Lanka has been assigned a 7.5% weighting in J.P. Morgan’s new frontier-market local-currency government bond index, placing the country among the largest components of the benchmark.

The Government Bond Index–Emerging Markets Edge, or GBI-EM Edge, is expected to be launched by the end of September and will track close to US$330 billion in government bonds across 26 frontier markets.

Sri Lanka’s 7.5% share is just below the maximum country weighting of 8%.

Vietnam, Egypt, Morocco, Pakistan, Bangladesh and Kazakhstan have each been assigned the maximum 8% weighting, while Nigeria accounts for around 7.4%.

In simple terms, the index acts as a guide for international investors looking at government bonds issued in the domestic currencies of smaller emerging or “frontier” economies.

Sri Lanka’s inclusion means rupee-denominated government bonds will form a relatively large part of that benchmark.

However, a 7.5% weighting does not mean that 7.5% of a fixed amount of foreign investment will automatically flow into Sri Lanka. Rather, investors and fund managers who follow or compare their portfolios against the index may use that weighting as a reference when deciding how much exposure to hold.

Sri Lanka has received USD 748.6 million in workers’ remittances in August 2026, according to the Central Bank of Sri Lanka (CBSL).

According to a Central Bank report, the figure marks an increase compared to the corresponding month last year.

Sri Lanka received USD 680.8 million in remittances from migrant workers in August 2025.

Meanwhile, total remittances received from Sri Lankan migrant workers during the first eight months of 2026 amounted to USD 6.131 billion, the report said.

This also marks an increase compared to the corresponding period last year, with Sri Lanka having received a total of USD 5.116 billion in remittances during the first eight months of 2025.