Ghana's sovereign dollar bonds dropped on Monday after ratings agency Moody's downgraded the country's credit rating to Caa1.
According to Reuters, bonds fells across the curve with the 2051 bonds tumbling as much as 1.8 cents in the dollar to trade at 71.678 cents, Reuters cited credible data.
Moody’s downgraded Ghana’s long-term issuer and senior unsecured debt ratings to Caa1 from B3, and changed the outlook to stable from negative, citing the government's increasingly difficult task to face liquidity and debt challenges.
“Weak revenue generation constrains government’s budget flexibility, and tight funding conditions on international markets have forced the government to rely on costly debt with shorter maturity,” Moody’s had said.
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The government of Ghana has since been fighting the downgrade fiercely.
In a press release issued in Accra on Sunday, February 6, 2022, the government said the latest credit rating for Ghana’s was puzzling, citing progress with recent fiscal consolidation measures.
“We are at odds to understand Moody’s assertion of the deterioration of Ghana’s institutional strength, given Ghana’s reputation as a beacon of democracy in Africa.
“The government of Ghana is therefore completely puzzled by the decision to downgrade Ghana’s credit rating to Caa1, despite the series of progressive engagements we had with the team from Moody’s, the quality of data supplied, as well as the medium-term economic and fiscal focus of the government, underpinned by key fiscal consolidation reforms such as the policy decision to cut expenditure by 20%, as recently announced by the Minister of Finance,” the government said in the statement.