Moody’s Reviews Kenya’s Credit Rating After Improved Debt Affordability
Moody’s, a global rating agency, changed Kenya’s outlook from “negative” to “positive” on Friday, noting a probable reduction in liquidity issues and improved debt affordability over time.
Since last year, the East African government has been grappling with enormous debt and looking for fresh financing lines because of nationwide protests against proposed tax rises.
Domestic borrowing costs have begun to fall as part of a monetary easing cycle.
This might continue if the Kenyan government efficiently manages budget consolidation, allowing for more external funding choices, according to the paper.
“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.
📢 Moody’s has upgraded Kenya’s outlook to positive, affirming its Caa1 rating. 🇰🇪
— Mwango Capital (@MwangoCapital) January 25, 2025
—Moody’s changed Kenya’s outlook from negative to positive while affirming its Caa1 credit rating.
—The outlook upgrade reflects easing liquidity risks and improving debt affordability.
—Domestic… pic.twitter.com/keAfNql2Ua
The organization also stated that a new International Monetary Fund initiative would boost Kenya’s foreign financing.
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They also stated that other multilateral creditors, such as the World Bank, will continue to be important financial sources even without IMF funds.
Kenya’s local and foreign-currency long-term issuer ratings were affirmed at “Caa1” by the agency.
They cited continued elevated credit risks due to very low debt affordability and significant gross financing needs in comparison to funding sources.
Moody’s Reviews Kenya’s Credit Rating After Improved Debt Affordability
