Moody's Downgrades Mongolia's Sovereign Rating to B3
OREANDA-NEWS. Moody's Investors Service has today downgraded Mongolia's government issuer rating to B3 from B2, and initiated a review for further downgrade.
The key driver for the downgrade is the sharp deterioration in fiscal metrics, which Moody's does not expect will reverse materially in the next few years. Compounded by weak growth and already very low foreign exchange buffers, this will significantly exacerbate fiscal challenges and liquidity risks facing the government.
The review will allow Moody's to assess the speed and effectiveness of the policy response to these heightened challenges, and their implications for growth and the management of external liquidity, which would depend partly on the availability and cost of external financing.