S&P cuts Greece's credit rating

Credit rating agency lowers Greece’s sovereign credit rating as possible exit from eurozone becomes more likely

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Standard & Poor’s (S&P) credit rating agency has decided to keep its negative outlook on Greece, cutting the country’s sovereign rating to “CCC minus” from “CCC”, as the probability of a “Grexit” increases. The move was driven by the lack of progress in negotiation talks between Greece and its international lenders over the weekend. 

After following recent events closely, S&P stated that Greece is likely to default on its commercial debt over the next six months. 

Although next Sunday’s snap referendum on the bailout conditions called by Greek Prime Minister Alexis Tsipras is likely to determine the next stage of the debt saga, a “Grexit” would lead to a serious foreign currency shortage for the private and public sectors in the country, which may in turn lead to the rationing of key imports, noted the rating agency.

A Greek government official announced on Monday that Greece cannot afford the $1.8 billion tranche which has to be paid to the International Monetary Fund (IMF) on Tuesday.

TRTWorld and agencies