Moody’s downgraded Kenya’s long-term foreign currency and local currency issuer ratings, as well as the country’s senior unsecured debt rating, to B3 from B2 on Friday.
“The rating downgrade was driven by an increase in the government’s liquidity risks,” the rating agency stated.
Kenya’s domestic funding conditions have deteriorated significantly in the last two months, according to the agency, with very low net domestic issuance contributing to financing shortfalls and delays in government spending.
This was stated in light of Kenya’s domestic funding conditions deteriorating significantly over the last two months.
Moody’s also stated that the latest ratings were under review for a possible downgrade due to Kenya’s continued limited access to external financing options.
Moody’s expects Kenya to rely primarily on concessional financing from multilateral financial institutions, commercial syndicated loans, and borrowing from regional development banks to meet its external financing needs, because Kenya lacks access to international bond markets to refinance upcoming external amortizations.
