Moody's revises Kenya's ratings to 'positive' on potential liquidity risks easing

Published 01/24/2025, 06:17 PM
Updated 01/24/2025, 06:56 PM
© Reuters. FILE PHOTO: A general view shows the central business district of Kenya's capital Nairobi, April 10, 2017. REUTERS/Thomas Mukoya/File Photo

(Reuters) - Global ratings agency Moody's (NYSE:MCO) revised Kenya's outlook to "positive" from "negative" on Friday, citing a potential ease in liquidity risks and improving debt affordability over time.

The East-African country has been struggling with heavy debt and looking for new financing lines since last year due to nationwide protests against proposed tax increases.

Domestic financing costs have started to decline amid a monetary easing cycle and this could continue if the Kenyan government effectively manages its fiscal consolidation, opening doors for external funding options, the report said.

"Given low inflation and a stable exchange rate, there is potential for further reductions in domestic borrowing costs as past monetary policy rate cuts pass through to lower long-term borrowing costs," Moody's said.

© Reuters. FILE PHOTO: A general view shows the central business district of Kenya's capital Nairobi, April 10, 2017. REUTERS/Thomas Mukoya/File Photo

The agency added that a new International Monetary Fund program would enhance Kenya's external financing while other multilateral creditors such as the World Bank will continue to be significant financing sources, even without the IMF funding.

The agency affirmed Kenya's local and foreign-currency long-term issuer ratings at "Caa1", citing still elevated credit risks driven by very weak debt affordability and high gross financing needs relative to funding options.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.