Moody’s affirms Bolivia’s rating, downgrades outlook

RIO DE JANEIRO, BRAZIL – Moody’s Investors Service changed the outlook on Bolivia’s government ratings to negative from stable and affirmed the B2 foreign currency rating.

The firm also affirmed Bolivia’s long-term local currency issuer ratings and affirmed Bolivia’s senior unsecured foreign and local currency ratings of B2. (See more from International).

Read also: Check out our coverage on Bolivia

Moody’s argued that the change in outlook to negative reflects the risk that Bolivia’s sovereign credit profile could weaken further.

Bolivia has significant fiscal deficits, its reserves are in the red, and it has a high risk of further weakening its sovereign credit profile.

“Moody’s believes that the government will fully service its external debt obligations, the persistent multi-year decline in Bolivian fiscal savings and foreign exchange reserves, increases the government’s liquidity risks,” the rating agency said.

The agency also indicated that the affirmation of the B2 rating balances Bolivia’s credit strengths, including a favorable public debt structure and high debt affordability, against its key credit challenges, including weakening government liquidity conditions and declining exchange rate reserves.