Fitch lowers Laos

Fitch Ratings said it downgraded Laos' long-term foreign-currency issuer default rating to CCC- from CCC, but affirmed the long-term local-currency IDR at CCC. Fitch typically does not assign outlooks to sovereigns with a rating of CCC+ or below. The agency also removed the long-term IDRs from under criteria observation.

“The downgrade of Laos' long-term foreign-currency IDR reflects a further rise in external liquidity risks, driven most recently by the spike in commodity prices and tightening global financing conditions,” the agency said in a press release.

Fitch noted the Lao kip fell against the U.S. dollar by almost 25% since February 2022 and 35% since last year at the official rate.

“The authorities have taken steps that have stabilized the official rate since end-June, but we expect some further depreciation in the remainder of 2022,” the agency said.

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