The UAE government has kept its Aa2 sovereign rating – the highest in the region – with a stable outlook from global ratings agency Moody's Investors Service. The Ministry of Economy on Wednesday said the rating was "another testament to the success of the country's financial and economic vision and policies". Sheikh Hamdan bin Rashid, Deputy Ruler of Dubai and Minister of Finance, said the country's classification "reflects the strength and resilience of the country's economy and its ability to overcome various challenges, especially in light of the exceptional circumstances that the world is witnessing due to the Covid-19 pandemic". This "proved beyond any doubt" the nation's finances are built on solid foundations, Sheikh Hamdan said. Rival ratings agency Fitch recently assigned an AA- rating to the UAE's sovereign debt. Moody's this week announced a shake-up of how it assesses foreign and local currency debt ceilings, which led to it increasing local and foreign currency debt ceiling ratings for the UAE to Aaa, its highest level, from Aa2. Local currency ceilings are typically set from six to zero notches above the sovereign rating, with most ratings three or more notches higher. Foreign currency ratings are typically no more than two notches higher. "While the particular drivers of changes in ceilings with the implementation of the methodology update are country-specific, higher local-currency ceilings generally reflect Moody's assessment that the government, through its footprint and actions, poses lower risk to other issuers than previously estimated," the rating agency said.
