Moody's downgrades PNG's credit rating

3:02 pm on 26 April 2016

The credit ratings agency Moody's has downgraded Papua New Guinea's foreign currency and local currency issuer ratings.

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Photo: RNZI

The ratings have gone down from B1 to B2.

Moody's says heightened balance of payments pressures have put strains on foreign currency reserves and will continue for two years.

Another driver of the downgrade is the government's persistent unfavourable domestic funding conditions.

These have increased refinancing risks and eroded debt affordability.

Moody's says the outlook on the ratings is stable with medium term economic growth prospects remaining robust.