The Central Bank of Sri Lanka (CBSL) continues to refrain from monetary financing of the deficit, and exchange-rate flexibility has been maintained. High Government Debt: Debt remains elevated despite the sharp fiscal adjustment and debt restructuring, though we expect gradual debt reduction over the medium term. Climate Vulnerability SignalsThe results of our Climate.VS screener did not indicate an elevated risk for Sri Lanka. As Sri Lanka has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. As Sri Lanka has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile.