- Fitch, the global rating firm, has slashed Kenya’s credit score to the ‘highly speculative’ rating of B. It had earlier given B+, which is ‘speculative.’
Fitch, the global rating firm, has slashed Kenya’s credit score to the ‘highly speculative’ rating of B. It had earlier given B+, which is ‘speculative.’
The revised credit rating of B indicates that Kenya has a “material risk” of defaulting on some of its debt obligations due to its high external debt obligation given the current constrained status of the liquidity in the global financial market. Rising financing costs in the international market and Kenya’s soaring debt repayment obligations in the forthcoming financial year including the maturity of a $2 billion (Sh245.6 billion) Eurobond in June 2024 were pointed out as the reasons for the downgrading. The Fitch ratings pointed out the tight global financial market, the shrinking foreign exchange reserves caused by the war in Ukraine, the Covid-19 pandemic and the increase in interest rates by the US central bank as other reasons for the downgrade.
The Treasury has brushed aside the variations in the credit rating scores and stated that the sovereign credit ratings for Kenya by October had been relatively stable, standing at B with a stable outlook, B+ with a negative outlook and B2 with a negative outlook by Standard & Poor’s (S&P), Fitch and Moody’s, respectively.
The Treasury of Kenya in its Bulletin noted that the country set targets of graduating to investment grade (BBB-) and attracting cheaper debt from global markets by reducing its debt appetite, improving exports and expanding its dollar reserves.
Also read;
https://trendsnafrica.com/kenya-set-to-receive-imf-support/
https://trendsnafrica.com/kenyas-debt-burden-crosses-the-sh8-61-trillion-mark/
https://trendsnafrica.com/rising-external-debts-dents-kenyas-growth-outlook-for-2022/
Kenya is under the 38-month IMF Fiscal consolidation Programme aimed at reducing its debt vulnerabilities by cutting spending while increasing revenues.
