Dubai: Moody s Investors Service has affirmed the Aa2 long-term issuer rating of the Government of the United Arab Emirates (UAE). The outlook remains stable.
“The rating affirmation is supported by the relatively muted impact of the pandemic on the federal government s fiscal strength, in part the result of an effective government policy response to the pandemic,” Moody’s said
The rating agency said the UAE s rating is supported by unconditional support from Abu Dhabi for the federal government.
The stable outlook reflects broadly balanced risks, consistent with the stable outlook on the Abu Dhabi sovereign rating. World leading progress on vaccinations should support the economic recovery, limiting the impact of the pandemic on the UAE s credit metrics, although the pace of the recovery in key sectors will vary, with trade and potentially tourism likely to recover before air passenger transportation.
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Moody s Investors Service maintained the UAE’s Aa2 long-term issuer rating, the agency s third-highest, due to the rapid reaction of the country s various institutions in rolling out a slew of measures to counter the Covid-19 pandemic, which it said did not materially affect the Arab world’s second biggest economy.
The UAE s fiscal strength remains robust, the ratings agency said as it maintained its stable outlook. “The rating affirmation is supported by the relatively muted impact of the pandemic on the federal government s fiscal strength, in part the result of an effective government policy response to the pandemic,” Moody’s said in a statement.
UAE banks weakening credit quality may drive loan restructuring issacjohn@khaleejtimes.com Filed on May 4, 2021
Weakening credit quality, according to analysts, is likely to drive loan restructuring at large-to-mid-sized accounts, with smaller businesses and retail loans facing impairment risk.
The UAE Central Bank has extended until mid-2022 some stimulus measures introduced last year to mitigate the impact of the coronavirus crisis on the economy.
Eleven UAE national banks have reported around Dh7.74 billion in first quarter net profit, a growth of 9.6 per cent over the same period last year, amid warning by analysts of deteriorating credit quality for major banks.