S&P Global Ratings downgraded its ratings on Zambia due to the country's low foreign currency reserves and rising external debt-service obligations.
The rating agency cut the long- and short-term foreign- and local-currency sovereign credit ratings to CCC+/C from B-/B. The outlook on the long-term rating is stable.
The rating agency estimates reserve coverage at 1.6x monthly current account payments in 2019. It also estimates that government external debt service will likely average about $1.2 billion per year through to 2022, with the Bank of Zambia's foreign currency reserves at close to $1.4 billion in 2019.
The stable outlook reflects S&P's view that the Zambian government can meet its commercial debt obligations in the coming 12 months.
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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.
