Moody's warns of Niger default risk due to sanctions

The agency downgraded the country's long-term foreign and local currency issuer ratings by two notches - from B3 to Caa2 - with the possibility of further deterioration

The international rating agency Moody's has downgraded the long-term issuer ratings of the government of Niger in foreign and national currency by two steps - from B3 to Caa2 - with the possibility of further deterioration, the agency said.

The downgrade is due to a military coup in the country and sanctions imposed by the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union against the Nigerian government.

“These sanctions , which include the suspension of all commercial and financial transactions between ECOWAS member states and Niger, as well as the freezing of Niger’s assets in the central banks and commercial banks of ECOWAS countries, if maintained, are likely to prevent Niger from making upcoming principal repayments or interest to creditors, which, according to Moody's definition, constitutes a default.

At the end of July, there was a coup in Niger. The military overthrew President Mohamed Bazum, the HEAD of the presidential guard, General Abdurahman Chiani, declared himself the new leader of the country. Earlier, the military seized power in Mali and Burkina Faso.

West African leaders threatened to bring in troops if the military did not bring the president back to power . Burkina Faso and Mali responded by warning that they would regard an intervention in a neighboring country as a declaration of war.

The EU and the US condemned the coup. The State Department ordered some members of its diplomatic mission and their families to leave the country. France also began evacuating its citizens.

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The Kremlin said it was "seriously concerned" about the situation and that Moscow was in favor of "restraint on all sides, the restoration of the rule of law."