Moody's downgrades Oman

Moody's Investors Service said it downgraded the long-term issuer and senior unsecured bond ratings of the government of Oman to Baa3 from Baa2.

The agency also lowered Oman's long-term foreign-currency bond ceiling to Baa2 from Baa1 and long-term foreign-currency deposit ceiling to Baa3 from Baa2.

The agency also lowered its short-term foreign-currency deposit ceiling to prime-3 from prime-2, while the short-term foreign-currency bond ceiling is unchanged at prime-2.

Oman's long-term local-currency bond and deposit ceilings also were lowered to Baa2 from Baa1.

The outlook remains negative.

The key driver of the downgrade is an expectation that Oman's fiscal and external metrics will continue to weaken, Moody's said, due in part to institutional and policy constraints.

Subdued growth over the next few years also will weaken economic resiliency.

The negative outlook reflects a view that, despite a number of credit strengths, the balance of risks to the Baa3 rating is skewed to the downside, Moody's added.

In the absence of significant measures to narrow the fiscal and current account deficits beyond the current plans, Oman's capacity to absorb potential shocks would erode further.

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