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Moody's raises Nigeria's rating from 'B3' to 'B3' due to its improved external and fiscal position

Moody's, the credit rating agency, upgraded Nigeria's ratings by a notch from "Caa1", citing significant improvement in the country's fiscal and external positions.

The World Bank announced earlier this month that Nigeria's economy had achieved its highest growth rate in about a decade, in 2024. This was due to a strong quarter and a better fiscal position. It warned, however, that high inflation is still a problem.

Moody's stated that the recent overhaul of Nigeria's Foreign Exchange Management Framework... had markedly improved the CBN's reserves of foreign currency and bolstered its balance of payments.

Moody's says that the inflationary risk in Nigeria has decreased due to policy changes. The nascent signs that inflation and borrowing costs will be easing are boosting confidence in these policy changes.

The agency revised Nigeria’s outlook from “positive” to “stable”, as it expects the recent progress in external and fiscal areas to continue at a slower rate if oil prices drop.

Moody's stated that "the stable outlook reflects Moody's expectations that external and fiscal improvement will decelerate, but not reverse completely." (Reporting and editing by Mohammed Safi Shamsi in Bengaluru, Nishara K.P.

(source: Reuters)