Post date: Mar 07, 2011 3:45:0 PM
Moody's cuts Greek credit rating, describing Greek government debt as 'highly speculative.'
GREECE-RATING CUT - As Greek anger continues to rise over the government's handling of the economic crisis, there's been a further setback.
The country's credit rating has been slashed again - this time by three notches, on fears efforts to cut its debt will not be enough.
Moody's cut Greece's rating from Ba1 to B1, in a move the Greek finance ministry describes as completely unjustified.Rabobank analyst Jane Foley said that while foreign exchange investors didn't appear too concerned, it was a different story on the fixed income market.
JANE FOLEY, RABOBANK ANALYST, SAYING:
"We have seen spreads on Greek yields move higher versus German yields and we've seen of course yields in absolute terms move higher too. Now that suggests that the risk of sovereign default is being priced in at a greater rate, so that does suggest this news has been taken quite negatively."
Moody's fears Greece hasn't done enough to cut its debt and risks failing to keep the terms of the EU/IMF bailout.
The downgrade is putting extra pressure on European leaders to ease the terms of the loan agreement, which have been criticised as too harsh.
Kirsty Basset, Reuters.