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In a series of downward revisions by global rating agencies, Fitch Ratings has now downgraded Bangladesh’s sovereign rating outlook from stable to negative. This decision, announced on Tuesday, is attributed to the country’s dwindling reserves and tightening dollar liquidity, which have heightened its susceptibility to economic shocks.
This latest downgrade follows similar moves by S&P Global Ratings and Moody’s (NYSE:MCO) Investors Service earlier this year, underscoring the increasing economic pressures faced by the South Asian nation. Despite Bangladesh’s acquisition of a $4.7 billion bailout from the International Monetary Fund (IMF) in January 2023, concerns about the nation’s economic health persist.
S&P Global Ratings had previously revised their outlook on Bangladesh, reflecting growing apprehensions about the country’s financial stability. This revision came in spite of the substantial IMF bailout, indicating that international financial support has not been sufficient to alleviate concerns about the country’s economic condition.
In May 2023, Moody’s Investors Service had already reduced Bangladesh’s credit rating. The downgrade was one of the first signs of growing unease among global financial institutions about the country’s economic trajectory.
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