- LONDON: Fitch Ratings downgraded Bahrain’s sovereign debt rating for the second time this month, lowering the country two notches and putting it on watch for further cuts.
The move comes less than two weeks after Fitch downgraded Bahrain one level, citing unrest in the country.
Fitch now rates Bahrain at BBB, which is two steps above junk territory. The ratings agency also downgraded the country’s local currency default rating two notches to BBB+.
The ratings agency said the declaration of martial law could harden the protesters’ opposition and possibly lead to more violence, damaging the country’s economy.
“The spectrum of possible political outcomes has widened and downside risks to political stability and sovereign creditworthiness have increased significantly,” said Purvi Harlalka, director of Fitch’s Middle East and Africa Sovereign Ratings Group.
Standard & Poor’s Ratings Services downgraded the country a notch last month, while Moody’s Investors Service has put it on watch for downgrade.