Riyadh – Mubasher: Moody’s assigned a rating of "A1" to the Saudi global Trust Certificate Issuance Programme.
The government of Saudi Arabia's payment obligations associated with these Trust Certificates reflects the rating assigned on the long-term, according to the report.
“Saudi Arabia's A1 stable long-term issuer rating reflects very high levels of fiscal and economic strength and high institutional strength,” Moody’s reported.
The report noted that the fall in oil prices pushed the budget balance into deficit, eroding the government's reserves and prompting it to issue bonds on the international market for the first time in 2016.
The rating firm also pinpointed that the external debt of the Kingdom is rising, expecting that the annual external debt repayments will remain low.
Saudi Arabia's credit challenges include the economy's high dependence on oil, as well as a rigid government spending structure and government revenues that are vulnerable to oil price volatility, Moody’s mentioned.
Moody’s expected that the Saudi reforms will slow amid changes in oil prices and sharp population rise, adding to geopolitical risks, driven by regional instability and the country's strategic rivalry with Iran.
