Moody's downgrades Tunisia citing instability and social unrest, and not to mention food riots

As if this one wasn't expected.  Tunisia is downgraded.  The reasons being instability and social unrest.  I'll say.  Via Moody's:

Moody's Investors Service has downgraded to Baa3 from Baa2 the local and foreign currency government bond ratings of the Tunisian government and changed the outlook to negative from stable. Concurrently, Moody's has also downgraded the government's foreign currency bond ceiling to Baa1 from A3, the foreign currency deposit ceiling to Baa3 from Baa2 and the short-term rating to P-3 from P-2. All the other ratings and ceilings are unchanged.

The main drivers for today's rating action are as follows:

(1) The country's instability due to the unexpected recent regime change, which resulted from the ongoing political crisis that first began as social unrest.

(2) The significant uncertainties surrounding both the economic and political outcomes.

(3) The ongoing unrest and the fluidity of the political situation which further endangers the country's future stability.

In a related action, Moody's has today also downgraded to Baa3 from Baa2 the ratings of the Central Bank of Tunisia, which issues debt on behalf of Tunisia's Ministry of Finance and is therefore fully and unconditionally guaranteed by the government of Tunisia.


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