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Moody's raises Saudi Arabia's local and foreign currency rating to 'Aa1'

1 min

Credit rating agency Moody's raised Saudi Arabia's local and foreign currency rating to 'Aa1' from 'Aa2' on Friday, citing increased predictability of the government's decision-making processes affecting the private sector.

For the world's largest crude exporter, non-oil economic growth is a top priority © Mena Today 

Credit rating agency Moody's raised Saudi Arabia's local and foreign currency rating to 'Aa1' from 'Aa2' on Friday, citing increased predictability of the government's decision-making processes affecting the private sector.

For the world's largest crude exporter, non-oil economic growth is a top priority and the government has accelerated policies to drive investment into tourism and expand the private sector.

The change in rating reflects, "increased predictability of policies and decision-making processes affecting non-government issuers given institutional improvements," the ratings agency said in a statement.

The "zero-notch gap" between rating for the foreign currency and the local currency is aided by the central bank's very large foreign-exchange reserve and reflects very low transfer and convertibility risks, Moody's added.

It, however, attributed reliance on a single revenue source for both the private and the government sector and challenging regional geopolitical dynamics for the "three-notch gap" between the local-currency rating and the 'A1' sovereign rating.

Fellow rating agency S&P Global in March affirmed Saudi Arabia's sovereign rating and outlook betting on social and economic reforms to improve the country's prospects.

Reporting by Vaibhav Sadhamta

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