DUBLIN: Moody's on Friday cut Ireland's sovereign rating by two notches and kept its outlook on negative, a day after fellow ratings agency Fitch upgraded its outlook for the country.
Moody's said the downgrade to BAA3 from BAA1 -- which puts its rating two notches below both Fitch and Standard and Poor's -- was due to the expected decline of the government's financial strength, the country's weaker economic growth prospects and uncertainty around solvency tests required by the European Stabilization Mechanism (ESM).
It said the country may need to take further austerity measures to meet its fiscal goals and that its financial position may suffer as a result of rises in European Central Bank interest rates.
"Should the intended fiscal consolidation goals not be met, a further rating downgrade would likely follow. Moreover, a further deterioration in the country's economic outlook would also exert downward pressure on the rating," Moody's said, adding that upward pressure could also develop on the rating. ' Reuters
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Moody's said the downgrade to BAA3 from BAA1 -- which puts its rating two notches below both Fitch and Standard and Poor's -- was due to the expected decline of the government's financial strength, the country's weaker economic growth prospects and uncertainty around solvency tests required by the European Stabilization Mechanism (ESM).
It said the country may need to take further austerity measures to meet its fiscal goals and that its financial position may suffer as a result of rises in European Central Bank interest rates.
"Should the intended fiscal consolidation goals not be met, a further rating downgrade would likely follow. Moreover, a further deterioration in the country's economic outlook would also exert downward pressure on the rating," Moody's said, adding that upward pressure could also develop on the rating. ' Reuters
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