Fitch said it was bringing down Sri Lanka’s rating one notch to B plus from BB minus, and that it saw no immediate end to the island’s drawn-out separatist conflict that is bleeding the economy. “The ratings downgrade of Sri Lanka reflects the increased vulnerability of sovereign credit worthiness to adverse shocks associated with rising inflation,” said James McCormack, Head of Asia sovereign ratings.

He said persistently large fiscal deficits and worsened terms of trade due to high oil prices, and Colombo’s greater recourse to commercial and market-based financing, also added to their decision to downgrade Sri Lanka. More... Discuss this story Published: Thu Apr 3 20:49:47 EDT 2008

The Liberation Tigers of Tamil Eelam, who are fighting for a separate homeland for minority Tamils, however, said they lost only one fighter, and instead said 25 soldiers were killed in the gunbattles that erupted along the northern frontlines.

Both sides are known to exaggerate enemy losses while playing down their own casualties, and independent confirmation is not possible from the battlefield areas where access is denied. More... Discuss this story Published: Thu Apr 3 09:54:37 EDT 2008

The shrine at Madhu is in the north-west of the country where the army is battling the Tamil Tigers.

The Bishop of Mannar, Rayappu Joseph, said he had appealed to both sides to respect the area as a no-war zone.

The shrine at Madhu is a well-known pilgrimage site for Catholics, who comprise about 6% of the population. More... Discuss this story Published: Thu Apr 3 20:45:53 EDT 2008