Global Arab Network | Standard & Poor's Raises Morocco Rating On Improving Economic Flexibility

Translate this article to your language:

GANPublications

e-Publications

Add Site to Favorites

Add Page to Favorites

Make Homepage

Share This Page

RSS Feed

--------------------------------------------------------------------------------------------------------------------
| |

Standard & Poor's Raises Morocco Rating On Improving Economic Flexibility

Global Arab Network - - Andy McDonough

Tuesday, 23 March 2010 11:55

Standard & Poor's Ratings Services said today that it has raised its long-term foreign currency sovereign credit rating on the Kingdom of Morocco to 'BBB-' from 'BB+', and its long-term local currency sovereign credit rating to 'BBB+' from 'BBB'. Standard & Poor's also raised its short-term foreign currency sovereign credit rating on Morocco to 'A-3' from 'B' and its short-term local currency sovereign credit rating to 'A-2' from A-3'. The outlook on the long-term ratings is stable. Standard & Poor's raised its transfer and convertibility assessment for Morocco to 'BBB+' from 'BBB'.

At the same time, Standard & Poor's affirmed the 'BBB-' foreign currency issue ratings on the Kingdom's foreign currency commercial debt, and withdrew its recovery rating of '2' on the debt issued by Morocco; such ratings are only assigned to the foreign currency debt issued by speculative-grade issuers.

Morocco is the 15th sovereign to have its foreign currency debt raised to investment grade.

"The upgrade reflects our view of the Moroccan government's improved economic policy flexibility as a result of its track record in reducing the country's fiscal and external debt burdens over the past decade," said Standard & Poor's credit analyst Veronique Paillat-Chayrigues.

Once a key credit weakness, Morocco's general government debt indicators have converged with the 'BBB' median more rapidly than it had previously expected, while the external balance sheet continues to compare favorably with those of 'BBB' rated sovereigns.

"We also factor in the high political stability and the government's momentum for its reform program, including large public works, which has raised Morocco's trend growth prospects, and contributed to improving gradually the country's still weak social indicators," said Ms. Paillat-Chayrigues.

The stable outlook balances Morocco's progress in modernizing its economy while strengthening its public finances, against the weaknesses of its economic structure. Further improvements in Morocco's credit-standing would likely follow a more rapid convergence of living standards with those of other 'BBB' rated sovereigns. Conversely, should recent high credit growth lead to unexpected problems in the banking sector, or should external liquidity deteriorate significantly, downward pressure on the ratings could emerge.

Global Arab Network

< Prev		Next >

Last Updated on Tuesday, 23 March 2010 12:02

Add comment

The opinions of the authors in articles published are theirs alone and do not necessarily reflect the views of Global Arab Network
------------------------------------------------------------------------------
Published comments are the opinions of private individuals and do not reflect the views of Global Arab Network