Moody's changes Kyrgyz Republic view to negative

Moody's Investors Service said it confirmed the Government of Kyrgyz Republic's local and foreign currency long-term issuer ratings at B3 and changed the outlook to negative.

Prior to this action, the B3 ratings were on review for downgrade.

The action concludes the review begun on March 24, which had raised the potential for a sharp and sustained decline in Russia's growth potential to lead to a consequent long-term weakening in Kyrgyz Republic's growth.

Kyrgyz Republic's local and foreign currency ceilings remain unchanged at B2 and B3, respectively. The one-notch gap between the local currency ceiling and the sovereign rating reflects the government's relatively large footprint in the economy, the unpredictability of some government decisions as reflected in its decisions on the Kumtor mine, and a volatile domestic political environment that could hinder the economy's long-term development. The one-notch gap between the foreign currency ceiling at B3 and the local currency ceiling takes into consideration weak policy effectiveness and high external indebtedness as well as the authorities' commitment to flexible exchange rates and moderately open capital accounts, Moody’s said.

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