Credit Rating Agencies Demand Clarifications Amid Unilateral Legislation and Protests in Israel
Posted on Jul 22, 2023 by Ifi Reporter
In recent days, international credit rating agencies have taken a keen interest in Israel's economic and political landscape, demanding clarifications from its leaders due to the ongoing unilateral legislative actions and a rising tide of protests.
Senior officials engaged in discussions have revealed that these recent events in Israel contradict the messages conveyed from Jerusalem in preceding months. These messages, including talks with Prime Minister Benjamin Netanyahu, suggested a commitment to reaching an understanding, and based on these assurances, the decision not to downgrade Israel's credit rating was made in recent publications. However, the current situation has led the rating companies to consider issuing special announcements regarding Israel, irrespective of the regular schedule for rating decisions or alerts.
Back in March, the credit rating company "Moody's" published an uncommon warning, cautioning against potential damage to Israel's economy if the legal reforms proceed as planned. The company's statement indicated that "the proposed reforms may weaken institutions and negatively impact Israel's credit rating." Moody's further stated that such legal changes could have long-term repercussions, affecting Israel's robust growth potential and elevating geopolitical risks.
Shortly before that, another credit rating company, Fitch, upheld Israel's credit rating at A+ level and maintained a "stable" rating forecast. However, they also issued a disclaimer noting that "the legal reform could still have a negative impact on the country's credit profile."
The situation remains under close scrutiny, as international credit rating agencies closely monitor Israel's actions and seek further clarifications from its leadership amidst the persisting unilateral legislation and mounting protests.
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