Moody's Investors Service has today downgraded the long-term issuer and senior unsecured debt ratings of the Government of Angola to B1 from Ba2 and assigned a negative outlook. The short-term issuer ratings have been affirmed at Not-Prime (NP).
The key drivers of the downgrade are:
- The government's financial position and the country's external position have deteriorated sharply due to the shock stemming from the structural downward shift in oil prices.
- Angola's high reliance on hydrocarbons and lower for longer oil prices are also pressuring its economic strength by greatly reducing the country's near-term growth prospects, a key credit support in the past.
The negative outlook reflects ongoing imbalances in the foreign exchange market which, in light of the diminished options for replenishing them, will continue to put downward pressures on official foreign exchange reserves and on the currency.
This rating action closes the review initiated on 4 March when Moody's placed the ratings on review for downgrade.
In addition, Angola's long-term local-currency bond and deposits country ceilings were lowered to Ba1 from Baa3. At the same time, the long-term foreign-currency bond ceiling was lowered to Ba3 from Ba1 and the long-term foreign-currency deposit ceiling was also lowered to B2 from Ba3.
