JOHN KEY WARNING OF NEW RULING FROM US CREDIT AGENCY
Prime Minister John Key says he cannot rule out a third credit downgrade after a visit here by ratings agency Moody’s to New Zealand.
On September 30, Fitch Ratings lowered New Zealand’s credit rating by one LEVEL to AA, citing the country’s rising debt and persistent and widening current account deficits.
Standard and Poor’s downgraded the country’s rating one notch from AA+ to AA later the same day.
Moody’s currently rates New Zealand’s sovereign debt as AAA.
Mr Key says he would not rule out a third downgrade, given the actions of the other agencies and the fact Moody’s has been downgrading other countries recently.
The Finance Minister Bill English says Moody’s raised the same issues as other agencies when he met with their representatives recently.
Mr English says the representatives raised the same concerns as Fitch and Standard and Poor’s, but gave no indication about what they thought about New Zealand.
Mr English says he pointed out, as he had to the other agencies, that New Zealand’s external position has improved quite a bit in the past three years and there is an indication of a shift in savings behaviour.
However, he says the ratings agencies are in a world very sensitive to debt – in particular sovereign debt – and are looking to downgrade AAA countries.