Moody's places Israel's ratings on review for downgrade

By Ovunc Kutlu

ISTANBUL (AA) - US-based global rating agency Moody's said it had placed Israel's A1 long-term foreign- and local-currency issuer ratings on review for downgrade.

"The initiation of the review is triggered by the unexpected and violent conflict between Israel and Hamas, in response to a large-scale, multipronged attack by Hamas," it said Thursday in a statement, referring to the conflict that began on Oct. 7.

"The most important consequence is the human cost arising from loss of life. This rating announcement addresses the credit implications of recent events," it said, adding: "The military conflict is increasing Israel's already relatively high exposure to geopolitical risks."

The agency said the "severity" of the current military conflict raises the possibility of longer-lasting and material credit impact on Israel's credit profile.

It added that the review for downgrade will focus on the duration and scale of the conflict and its implications for Israel's institutions, in particular the effectiveness of its policymaking, its public finances, and the economy.

Moody's said the review period may be longer than the typical three months.