Dubai – Mubasher: Moody's Investors Service on Saturday confirmed the 'Aa2' long-term issuer ratings of the UAE government and assigned a 'negative' outlook.
The confirmed Aa2 rating incorporates Moody's view that the Abu Dhabi government, the wealthiest of the seven emirates, stands fully behind the federal government of the UAE, Moody's said in a statement.
It added: "key driver of the ratings confirmation is Abu Dhabi's very large fiscal buffers in the form of diversified offshore investments, which will support the UAE's economic and fiscal resilience during a period of lower oil prices and subdued growth."
As for the 'negative' outlook, the ratings agency said that the outlook is due to the "lack of clarity around the formulation and implementation of government policies to arrest and reverse the large deficits and the deterioration in the net asset position created by lower oil prices, in the absence of which the UAE's fiscal buffers will erode over time, exerting downward pressure on the rating."
The UAE's long-term and short-term foreign- currency bond and deposit
ceilings remain unchanged at Aa2 and Prime-1, respectively, Moody's highlighted, noting that it has kept the gulf country's long-term local- currency bond and deposit ceilings unchanged at Aa2.
"Today's rating actions concludes the rating review for downgrade that Moody's initiated on 4 March 2016," the statement added.
