Moody’s puts Israel’s credit rating under review

International credit rating agency Moody’s announced that it is reviewing Israel’s “A1” credit rating for a possible downgrade. Moody’s statement said the rating outlook was previously “stable” and that the investigation was initiated due to the “unexpected and violent” conflict between Israel and Palestine.

LONG-TERM EFFECT OF WAR

The statement stated that Israel’s long-term credit rating of “A1” in foreign and local currencies was being reviewed for a downgrade. Israel’s credit profile was claimed to have proven resilient to terrorist attacks and military conflicts in the past, but the severity of the current military conflict means it will last longer and increase the financial credit rating, which was highlighted as increasing the possibility to have an impact.
The statement stated that the review of the note would focus on the possible duration and scale of the conflict, and that the review period could be longer than three months.

FITCH ALSO REVIEWED

International credit rating agency Fitch Ratings announced earlier in the week that it had placed Israel’s “A+” credit rating on negative watch due to geopolitical risks.
The statement states that the negative monitoring reflects the risk that the current conflict will expand to include large-scale military conflicts with multiple actors over a long period of time, and that other organizations and countries in the region may also be involved in the conflict.
Fitch had warned that an escalation of the Israeli-Palestinian conflict involving other actors in the region could result in a rating downgrade. (AA)