Global rating agency Moody鈥檚 has revised its ratings for six Bangladeshi banks, citing concerns over the country鈥檚 recent sovereign downgrade.
The banks affected are BRAC Bank, City Bank, Dutch-Bangla Bank, Eastern Bank, Mercantile Bank and Premier Bank.
Moody鈥檚 has downgraded BRAC Bank鈥檚 long-term (LT) local currency (LC) and foreign currency (FC) deposit ratings to B2 from B1.
Similarly, Mercantile Bank and Premier Bank have seen their LT LC and FC deposit ratings lowered to B3 from B2.
Meanwhile, City Bank, Eastern Bank and Dutch-Bangla Bank have had their B2 LT LC and FC deposit ratings affirmed. But, Moody鈥檚 has revised the outlooks on the LT deposit ratings of all six banks to negative from stable.
The rating agency also revised Bangladesh鈥檚 GDP growth forecast, projecting a slowdown to 4.5% from the earlier estimate of 6.3% for the current fiscal year. For the next fiscal year, the projection has been lowered to 5.8% from 6%.
Earlier this week, on Monday (Nov 18), Moody鈥檚 downgraded Bangladesh鈥檚 long-term ratings to B2 from B1, marking the second consecutive downgrade in under two years. The short-term ratings were affirmed at "Not Prime."
This marks the first time in 14 years that Moody鈥檚 has revised Bangladesh鈥檚 outlook to "negative" from "stable" since the country began receiving ratings from the agency in 2010.
The downgrade and negative outlook are expected to increase borrowing costs for both the government and the private sector, exacerbating challenges in accessing international funds amid ongoing high inflation.
