Moody’s downgrades Tunisia’s rating to B3 from B2, maintains Negative Outlook [Upd 1]
23/02/2021 21:49, TUNIS/Tunisia

(TAP) - Moody's Investors Service ("Moody's") said Tuesday it has downgraded Tunisia's long-term foreign-currency and local-currency issuer ratings to B3 from B2 and maintained the negative outlook.

The ratings agency has also downgraded the Central Bank of Tunisia's senior unsecured rating to B3 from B2 and maintained the negative outlook, as the BCT is legally responsible for the payments on all of the government's bonds.

The downgrade to B3 reflects weakening governance in the face of rising social constraints that increasingly inhibit the government's flexibility to implement fiscal adjustment and public sector reforms that would stabilize and eventually reverse a marked increase in its debt burden, Moody's agued.

It added that fiscal consolidation and reform of the public sector will require reaching a broad agreement with civil society institutions on both the direction and specific mode of implementation of a wide range of measures.

The negative outlook also captures downside risks related to further delays with the negotiation and implementation of a funded IMF programme.

"Such delays would increase uncertainty around the government's capacity to secure continued access to official external funding sources and maintain international capital market access at affordable terms in order to meet high funding requirements over the next few years."

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