Magonjwa Mtambuka
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- Aug 2, 2016
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Moody’s revises Kenya’s ratings to negative May 8 2020.
Kenya’s huge borrowing requirements has pushed down the country’s rating to negative from stable.
This negative outlook of B2 by Moody’s rating agency reflects the rising financial risks posed by Kenya’s huge borrowing requirements, which include amortization of external bilateral debt and the need to refinance a large stock of short term domestic debt.
Already, Kenya’s fiscal health is fast deteriorating as the closure of businesses and loss of jobs in key sectors erodes the country’s tax revenue base.
The rating agency notes that this debt structure also exposes Kenya’s fiscal metrics to exchange rate and interest rate shocks. Moody’s reckons that while Kenya does not face acute financial pressures at present, severe tightening of financial conditions will challenge the Government’s ability to meet larger financial needs without an increase in borrowing costs.
This will threaten the Government’s medium-term fiscal consolidation efforts, a key plank of its budgetary support deal with the International Monetary Fund (IMF).
Moody’s negative ratings follows closely from a recent deal reached between Nairobi and the IMF Executive Board for disbursement of $ 739 Million to assist in dealing with impacts of the COVID-19 Pandemic.
Source: kenyanwallstreet
Moody’s revises Kenya’s ratings to negative
Kenya’s huge borrowing requirements has pushed down the country’s rating to negative from stable.
This negative outlook of B2 by Moody’s rating agency reflects the rising financial risks posed by Kenya’s huge borrowing requirements, which include amortization of external bilateral debt and the need to refinance a large stock of short term domestic debt.
Already, Kenya’s fiscal health is fast deteriorating as the closure of businesses and loss of jobs in key sectors erodes the country’s tax revenue base.
The rating agency notes that this debt structure also exposes Kenya’s fiscal metrics to exchange rate and interest rate shocks. Moody’s reckons that while Kenya does not face acute financial pressures at present, severe tightening of financial conditions will challenge the Government’s ability to meet larger financial needs without an increase in borrowing costs.
This will threaten the Government’s medium-term fiscal consolidation efforts, a key plank of its budgetary support deal with the International Monetary Fund (IMF).
Moody’s negative ratings follows closely from a recent deal reached between Nairobi and the IMF Executive Board for disbursement of $ 739 Million to assist in dealing with impacts of the COVID-19 Pandemic.
Source: kenyanwallstreet
