Mubasher: Moody's Investors Service (Moody's) on Sunday announced changing the outlook on Qatar's long-term issuer rating to stable from negative, as well as confirming the GCC nation's long-term issuer and foreign-currency senior unsecured debt ratings at Aa3.
Qatar can weather the economic, financial and diplomatic boycott, according to the ratings agency’s recent report.
"This assessment is in part based on evidence of broad resilience of Qatar's credit metrics to the economic and financial blockade over the past 13 months," the New York-based ratings agency said.
Since 5 June 2017, Qatar has been facing outflows of foreign customers' deposits after four Arab countries led by Saudi Arabia cut their diplomatic and economic ties with the gas-rich state, accusing Qatar of financing terrorism. Diha forcefully denies the charges.
In the same vein, Moody’s also highlighted that the rating took into consideration several credit strengths embedded in Qatar's credit profile supported by the large net asset position of Qatari government, with an exception of high levels of per-capita income, very large hydrocarbon reserves and relatively low fiscal and external breakeven oil prices.
The stable outlook reflects Moody’s view that Qatar's credit metrics will likely remain consistent with a “Aa3” rating as the boycott continues, the report showed.
The outlook is also supported by Moody's view that a quick resolution or a significant escalation of the regional dispute materially affecting Qatar's credit metrics are a low-probability event.
"The rapid recovery in imports, with initial levels restored in less than four months, illustrates the economy's flexibility and policy effectiveness in rerouting supplies,” the report highlighted.
