SYDNEY, June 23 (Reuters) – Moody’s affirmed Australia’s coveted ‘AAA’ rating on Tuesday citing effective monetary policy and solid financial buffers, differentiating itself from rivals Standard & Poor’s and Fitch who had cut their outlook on the prized rating to negative.
Moody’s decision was supported by the “underlying resilience of the economy”, “adaptable labour markets and flexible exchange rates,” it said.
“The stable outlook reflects Moody’s expectation that downside risks to the credit profile are contained by the underlying resilience of the economy and Australia’s effective policy-making institutions,” it said in a statement.
Last month, Fitch downgraded its outlook on the AAA rating to negative following a similar action by S&P in April. Both cited the heavy blow to the economy and public finances from the COVID-19 pandemic.
“In Moody’s assessment, the resilience of the Australian economy supports a return to positive growth next year, without any significant long-lasting impact on growth potential once the crisis passes.”
Australia has been held up as one of the world’s top coronavirus mitigation success stories. In all, 102 people have died of COVID-19 in the country but it has reported no new deaths for more than three weeks.
Australian Treasurer Josh Frydenberg said in a statement Moody’s decision confirmed the country’s AAA credit rating from all three agencies, “in a reminder of the importance of maintaining our commitment to medium term fiscal sustainability.
“We are not through this crisis yet but with restrictions starting to ease, there are encouraging signs across the economy,” Frydenberg added. (Reporting by Swati Pandey; Editing by Jacqueline Wong)