Moody's credit rating agency on Thursday issued an update on Israel’s credit rating, saying that it is too early to determine whether the ceasefire agreement with Hezbollah has "significantly and sustainably" mitigated the risks that led to the agency's decision to downgrade Israel's sovereign credit rating, Reuters reported.
While the ceasefire, reached earlier this week, has provided some relief, Moody's remained cautious, saying, "It is too early to say whether these risks will be significantly and sustainably reduced.”
In September, Moody's downgraded Israel's credit rating from A2 to Baa1 and maintained a negative outlook.
While the agency noted on Thursday that geopolitical risks "appear to have partially diminished," it highlighted persistent domestic political risks.
"In our view, the Israeli government is pursuing policies that add to already high social tensions in the country," it said, referencing judicial reforms and proposals to exempt haredim from military service.
In May, Moody's reaffirmed Israel's credit rating at level A2, with a negative outlook.
In February, Moody’s downgraded Israel’s credit rating from A1 to A2 due to the war with Hamas. It was the first such downgrade in Israel's history.