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Investing.com -- S&P Global Ratings has placed Madagascar’s ’B-/B’ sovereign credit ratings on CreditWatch with negative implications due to heightened political instability following a military takeover.
The rating action comes after weeks of antigovernment protests that resulted in several casualties and culminated in the military seizing power on October 12 after President Andry Rajoelina left the country. Military leaders have promised to organize elections within two years.
S&P noted that the situation remains fluid with significant risks as uncertainty surrounding the political transition and its impact on the economy continues to be elevated.
The rating agency believes the current instability will hinder policymaking, at least in the near term, and will negatively affect economic and fiscal performance. The political crisis could also limit Madagascar’s access to external financing from official donors.
The CreditWatch placement reflects these concerns about the country’s governance and economic outlook following the military intervention.
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