Moody’s Changes Iceland’s Credit Rating to Negative Skip to content

Moody’s Changes Iceland’s Credit Rating to Negative

Credit rating agency Moody’s has lowered Iceland’s credit rating to negative. Iceland is currently rated in the category Baa3, which is only one level above junk.

Photo by Páll Stefánsson.

According to Bloomberg, Moody’s decision is based on the uncertainty of the country’s banking and financial system created by the Supreme Court’s ruling on foreign currency loans, reports.

Bloomberg interviews Kathrin Muehlbronner, Moody’s main analyst for Iceland, who says that although the potential damage to the Icelandic economy because of the Supreme Court’s ruling is unknown, it is clear that it can jeopardize the country’s economical restoration.

The Icelandic state’s financial contribution to the banks could increase considerably because of the ruling, given that the state is the only party that can raise the banks’ equity.

Click here to read more about the ruling on the foreign currency loans and here to read the full article on Bloomberg.

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