Moody's Investors Service has downgraded Tunisia's government issuer rating by one notch to Ba3 from Ba2 on political crisis. The outlook on the rating remains negative.
Tunisia's ongoing political uncertainty highlighted by the lack of timely progress in the national dialogue, increased external funding challenges, persistently large external and fiscal imbalances and fragile state of the country's banking sector are the key drivers of the rating action.
Moody's has also downgraded the debt rating of the Central Bank of Tunisia to Ba3 from Ba2 and kept a negative outlook. The Government of Tunisia is legally responsible for the payments on all of the central bank's bonds given that they are issued on behalf of the government.
In addition, Moody's has lowered Tunisia's country ceiling for foreign-currency deposits to B1 from Ba3, and the country ceiling for foreign-currency bonds to Ba1 from Baa3. The local-currency bond and deposit ceilings were lowered to Baa3 from Baa2. The short-term foreign-currency bond ceiling has also been lowered to Not Prime from P-3, while all other short-term ceilings remain unchanged.
