Nicaragua: Moody’s Improves Rating Outlook
Fiscal stability and the expectation that the necessary measures will be taken to mitigate the impact of eventual external shocks, was the justification given by Moody’s when deciding to raise the outlook for the debt rating from stable to positive.
Friday, July 21, 2017
Global Credit Research – 20 Jul 2017
New York, July 20, 2017 — Moody’s Investors Service has today affirmed the government of Nicaragua’s B2 foreign and local currency issuer ratings and changed the outlook to positive from stable.
Two key drivers underpin the positive outlook:
1) Continued fiscal stability and favorable economic prospects relative to peers, despite a significant decline in financial flows from Venezuela
2) Moody’s expectation that authorities’ macroeconomic policies will mitigate the impact of potential future external shocks, and support the strengthening of the sovereign credit profile
The affirmation of the B2 rating reflects credit strengths including strong economic growth, a policy framework geared towards maintaining macro-economic stability as well as lower-than-peers debt and interest burdens. These strengths balance the credit challenges posed by low per capita income and a high share of foreign currency denominated government debt.
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