14 Dec 2015

The  international sovereign credit rating agency, Moody’s Investors Service, has reaffirmed Botswana’s 2015 sovereign credit rating.

A press release from Bank of Botswana states that the A2 rating for both foreign and domestic bonds as well as the stable outlook is also reaffirmed for the year. 

The rating, the release says, is based on assessment that weighs government’s relatively strong balance sheet, net external creditor position and low public debt against potential challenges associated with middle income status and a small economy.

The release also explains that in making assessment, Moody’s emphasised the country’s sound policy framework, with effective fiscal consolidation in the aftermath of the global financial crisis, resulting in government debt remaining at low levels.

Due to this strong institutional framework, the release says, the rating agency expects authorities to implement fiscal and monetary policies that allow the economy to adjust to lower diamond prices and other external shocks.

It further states that the economy’s heavy reliance on the dominant diamond industry and the relatively slow pace of economy diversification remain key weaknesses for the rating over the long ter.

As in previous years, it says, Moody’s noted that given the healthy financial position and stable political and financial environment, the risks that could put renewed pressure on the ratings are judged to be low.  Ends