Moody's cuts Fiji view to negative

Moody's Investors Service said it changed the outlook on the Fiji Islands' Ba2 foreign- and domestic-currency government bonds and Ba3 foreign-currency country ceiling for bank deposits to negative from stable following a military coup on Monday that ousted the constitutional government. Fiji's Ba1 foreign-currency country ceiling for bonds retains its stable outlook.

"The immediate effects of the coup on government finance are not threatening, given the government's low level of external debt servicing requirements," Moody's vice president Steven Hess said in an agency rating.

"However, the effect on the tourism industry, investment and overall economic growth could lead to deterioration in government revenues at a time when spending pressures may increase." As a result, there is a risk of deterioration in government fiscal performance as well. Other potential effects of the coup, he said, include international repercussions, with some sanctions imposed by foreign governments and possibly the expulsion of Fiji military personnel from United Nations peacekeeping forces, a source of overseas remittances for Fiji.

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