NAIROBI, Jan. 25 (Xinhua) -- Global ratings agency Moody has revised Kenya's sovereign credit rating to positive from negative, seven months after a downgrade.
Moody said the revision is due to increasing likelihood of Kenya's liquidity risks easing and debt affordability improving over time.
"Domestic financing costs have started to decline and monetary pressure is easing and will continue to do so if the government sustains its more effective management of social demand and fiscal consolidation," Moody said in a statement released Friday evening.
It added that such a track record would boost Kenya's access to both concessional and commercial funding.
According to Moody, Kenya's revenue collection efforts, if successful, present potential for further improvement in debt affordability. The East African country still has elevated credit risks driven by weak debt affordability and high gross financing needs relative to funding options.
Kenya's National Treasury notes in its Public Debt Management Strategy 2025 that the downgrade of the country's credit rating had significantly impacted its ability to borrow commercial loans from various credit sources.
Rating downgrades, according to the Treasury, lead to increased borrowing costs, low investor confidence, currency depreciation and debt sustainability risk. ■
