19th October 2016

Moody's affirms the Czech Republic's A1 rating; maintains stable outlook

Moody's Investors Service has today affirmed the Czech Republic's A1 long-term issuer rating and the short-term MTN rating at (P)P-1. The outlook remains stable.The affirmation of the rating reflects the Czech Republic's fiscal resilience and its limited exposure to event risks, both of which anchor sovereign creditworthiness at the A1 level. That said, the affirmation also accounts for credit challenges arising from the economy's more limited potential growth over the medium term and slowing reform momentum due to a shifting political landscape.

The stable outlook on the rating reflects the strength of the government's balance sheet and the inherent buffers built into its credit profile, which are crucial in mitigating the impact of potential shocks emanating from main trading and investment partners.

Moody's has also affirmed the Czech Republic's senior unsecured debt rating at A1 as well as the senior unsecured MTN programme rating at (P)A1.

Its long-term local currency bond and deposit ceilings remain unchanged both at Aa2 and long-term foreign currency bond and deposit ceilings also remain unchanged at Aa2 and A1 respectively. The short-term foreign currency bond and deposit ceilings are also unaffected by this rating action and remain at Prime-1.

Rationale for affirmation is available here.

Members of the American Chamber of Commerce in the Czech Republic