Moody’s revises Kenya’s ratings to ‘positive’ on potential liquidity risks easing

(Reuters) – Global ratings agency Moody’s (NYSE:MCO) revised Kenya’s outlook to “positive” from “negative” on Friday, citing a potential ease in liquidity risks and improving debt affordability over time.

The East-African country has been struggling with heavy debt and looking for new financing lines since last year due to nationwide protests against proposed tax increases.

Domestic financing costs have started to decline amid a monetary easing cycle and this could continue if the Kenyan government effectively manages its fiscal consolidation, opening doors for external funding options, the report said.

“Given low inflation and a stable exchange rate, there is potential for further reductions in domestic borrowing costs as past monetary policy rate cuts pass through to lower long-term borrowing costs,” Moody’s said.

The agency added that a new International Monetary Fund program would enhance Kenya’s external financing while other multilateral creditors such as the World Bank will continue to be significant financing sources, even without the IMF funding.

The agency affirmed Kenya’s local and foreign-currency long-term issuer ratings at “Caa1”, citing still elevated credit risks driven by very weak debt affordability and high gross financing needs relative to funding options.

READ ALSO

This post appeared first on investing.com

Related Posts

Next Post

    Join our mailing list to get access to special deals, promotions, and insider information. Your exclusive benefits await! Enjoy personalized recommendations, first dibs on sales, and members-only content that makes you feel like a true VIP. Sign up now and start saving!

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.