Moody’s agency confirmed long-term rating of Moldova to "B3" with stable outlook

Chisinau, 5 November /MOLDPRES/- Moody's Investors Service has confirmed the long-term rating in foreign and local currency of the Republic of Moldova to "B3" and maintained stable outlook, according to a communiqué by the financial assessment agency.

According to the press release, the decision comes from strong economic growth, a moderate government debt, institutional capacity-building, due to the difficulties of government and low political predictability, moderate political risks and mitigation in the banking sector.

Moody's estimates that long-term rating for government bonds and foreign currency deposits remains unchanged at "B2" and "Caa1" respectively, while the rating for government bonds and local currency deposits remains at B2.

Decision confirming the grades "B3" balance challenges to the credit rating of Moldova, including the low level of GDP per capita, low economic and export fundamentals and limited institutional strength to moderate government debt and progress in the International Monetary Fund (IMF) program to address vulnerabilities in the banking sector.

Positive rating pressures could arise as a result of further reforms in the financial sector, along with the strengthening of the country's governance profile. Addressing structural impediments - such as the weak economic environment and labor shortage - could lead to improved marks of Moldova. Although it is unlikely that the rating of Moldova could be worsened if the conditions in the Transnistrian region are rapidly deteriorating, the financial evaluation agency said.

The final decision of the Moody's financial assessment agency on 2 November 2018 comes after the 13 January 2017 improvement in the country's B3 outlook from negative to stable. Moody’s noted it revised the rating as a result of “government funding cuts” after signing the IMF agreement “triggering additional multilateral and bilateral funding” and “adopting new banking regulatory framework to strengthen banking system governance.”

(Reporter V. Bercu, editor A. Răileanu)