Moody's Gives Kenya's Credit Outlook a Boost.
Moody's has changed Kenya's credit outlook from "negative" to "positive." The global credit rating agency still rates Kenya's debt at CAA1. But the new outlook is good news for Kenya's finances.
Moody's sees less risk ahead for Kenya. It thinks the country's debts will be easier to pay over time. Lower inflation and a steady exchange rate could help bring down borrowing costs, provided the government keeps tight control of spending.
Kenya has struggled with heavy debt. Last year, people protested against plans for higher taxes. The government needs new ways to get money. Better credit could open doors to loans from outside the country.
Moody's said Kenya must keep doing a good job to earn trust. In the past, the country has had trouble collecting more money through taxes.
Kenya's strengths help its rating. It has a big, diverse economy that handles shocks well. The country also has developed markets for capital and credit, which lets the government borrow money for a long time using Kenya's currency.
But Kenya still has problems. Its institutions and policies are not always reliable, and there is a good amount of political risk. Many people are poor, and the country already has a lot of debt. These things make Kenya less stable.
Moody's kept Kenya's local currency ceiling at B1 and foreign currency ceiling at B2. Ceilings show the highest rating possible for a country's debt. Kenya's ceilings are higher than its overall rating, but they are not at the top level. This is because of issues like corruption and weak rule of law in the country.
Moody's has changed Kenya's credit outlook from "negative" to "positive." The global credit rating agency still rates Kenya's debt at CAA1. But the new outlook is good news for Kenya's finances.
Moody's sees less risk ahead for Kenya. It thinks the country's debts will be easier to pay over time. Lower inflation and a steady exchange rate could help bring down borrowing costs, provided the government keeps tight control of spending.
Kenya has struggled with heavy debt. Last year, people protested against plans for higher taxes. The government needs new ways to get money. Better credit could open doors to loans from outside the country.
Moody's said Kenya must keep doing a good job to earn trust. In the past, the country has had trouble collecting more money through taxes.
Kenya's strengths help its rating. It has a big, diverse economy that handles shocks well. The country also has developed markets for capital and credit, which lets the government borrow money for a long time using Kenya's currency.
But Kenya still has problems. Its institutions and policies are not always reliable, and there is a good amount of political risk. Many people are poor, and the country already has a lot of debt. These things make Kenya less stable.
Moody's kept Kenya's local currency ceiling at B1 and foreign currency ceiling at B2. Ceilings show the highest rating possible for a country's debt. Kenya's ceilings are higher than its overall rating, but they are not at the top level. This is because of issues like corruption and weak rule of law in the country.
