Global ratings agency Moody’s last week cut Kenya’s senior unsecured debt rating as well as long-term foreign-currency and local-currency issuer ratings to B3 from B2.
“The rating downgrade is driven by an increase in government liquidity risks,” the agency said.
Also read: Kenya’s digital economy affected as fiat currency performs poorly
The agency added that Kenya’s domestic funding conditions have deteriorated considerably over the past two months, with very low net domestic issuance contributing to financing shortfalls and delays in government spending.
Moody’s also said it had placed the latest ratings on review for downgrade, as external financing options for Kenya also remain constrained.
Also read: Kenya to turn 500,000 acres of idle public land into maize production
Without access to international bond markets to refinance upcoming external amortizations, Moody’s said it expects Kenya to rely primarily on concessional financing from multilateral financial institutions, along with commercial syndicated loans and borrowing from regional development banks, to meet its external financing needs.
