Moody's downgrades Latvia

Moody's Investors Service said it downgraded the foreign- and local-currency ratings of the government of Latvia to A3 from A2, along with the foreign-currency deposit ceiling to A3 from A2. The foreign-currency bond ceiling remains at Aa1.

The outlook remains negative.

The downgrade was prompted by the recent worsening of the global liquidity crisis, which is likely to amplify deleveraging, thereby having a severe impact on the Latvian economy, Moody's said.

The government's financial strength is expected to experience a relatively long-lasting impairment as the weak economy will cause the budget deficit and public debt to swell, resulting in deterioration in the government's credit metrics relative to peers, the agency said.

Latvia's status as a large net importer of capital leaves the country particularly exposed to liquidity problems in the international financial markets, Moody's added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.