The Moody’s rating agency has changed its outlook for a sovereign rating of Belarus from stable to negative at the level B3, the Investing.com website reported.
The main reason for this deterioration of the outlook is heightened debt refinancing risks given tightening economic and financial sanctions that constrain financing options. For instance, these sanctions prevent Belarus from receiving new investments.
Moreover, new sanctions make Belarus’s dependency on Russia much bigger. Both countries have intensified their economic ties because Belarus is eager to change in focus from the Western market to Russia.
“While the precise impact of the sanctions will ultimately depend on the extent to which Belarus is able to mitigate the effects through increased support from other markets, such as Russia, Moody’s considers the balance of risks to Belarus’s economic and fiscal performance, and therefore to refinancing prospects, to be clearly to the downside,” said the agency in a statement.
Another reason is limited reserves that reduce Belarus’s capacity to withstand further shocks amid heightened political instability, Moody’s noted.
As of September 1, 2021, the external debt of Belarus was $18.3 billion, which is $0.3 billion less than it was at the beginning of the year. International assets of the country reached $8.5 billion.