Moody's, the credit rating agency, in its annual report on the economy of Lebanon, warned of the exacerbation of the current conditions, large losses for the economy, the erosion of the country's foreign exchange reserves and a jump in inflation rates.
The agency revealed that its classification of the Lebanese economy at the C level in the absence of future consideration reflects the impact of the economic, financial, and social crises, amid the weakness of state institutions, and the government's inability to address these situations. Noting that the collapse of the currency in the parallel market, which led to high inflation, created an unstable environment, whereby access to external financing support for restructuring government debt is conditional on implementing specific reform steps.
According to the agency, Lebanon's rating is the lowest compared to the rest of the agency's country ratings and it reflects Moody's expectations that bondholders' losses will exceed 65% of the total value of their investments in bonds issued by the state.
According to the agency, it is unlikely to change the current classification of Lebanon before the restructuring, given the size of the economy, financial and social challenges, and our expectations for very large losses, indicating that without taking steps to reform the economy and financial conditions, official external financing support to support debt restructuring will not be readily available.
Source (Al-Arabiya.net, Edited)
