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Namibia downgraded ...as government rejects Moody's rating

Sat, 12 August 2017 16:50
by Online Writer?á
News Flash

Namibia's economy has suffered a downgrade by Moody's from Baa3-to Ba1, a result which came yesterday leaving the ministry of finance and GRN stunned.     "The Government of the Republic of Namibia took note with concern  of the decision by Moody’s Investor Services to downgrade Namibia’s international credit rating to Ba1, from Baa3- in December 2016, while maintaining its negative outlook," announced Calle Schlettwein yesterday.   This essentially put Namibia’s international debt issuances in the category of “junk status”, an assessment that the ministry said it does not concur  with.   "We further note that Namibia’s local currency bond and bank deposit ceilings were also lowered to A2 from A1; the foreign currency bank deposit ceiling to Ba2 from Baa3; and the foreign-currency bond ceiling to Baa2 from A3," said the ministry.    While these ratings, still reflect investment grade, Finance feels that domestic economic conditions do not warrant a downgrade at this point in time.   Government has lashed back at the move by Moody's saying that its decision was based on unsound shallow "desktop research".   "After having considered the statement the Namibian Government holds the strong view that a substantive rating change should have been preceded by an in depth assessment and engagement of the Namibian authorities instead of a desk review of developments in  the corridors of international financial head quarters.   "This recent rating acting by Moody’s relied merely on an exchange of emails on a single item, that of out-standing invoices and how Government is planning to settle them. This is highly regrettable. A thorough assessment taking all factors into consideration would  have been the proper way in dealing with reviewing  Namibia’s sovereign credit rating," says GRN.