Moody’s Investors Service officially cut Ireland’s credit rating to junk this Tuesday evening, with the prediction that Ireland will require a further bailout.
The ratings agency downgraded Ireland’s bond ratings by one notch, reducing it from Baa3 to Ba1, with a negative outlook.
“Although Moody’s acknowledges that Ireland has shown a strong commitment to fiscal consolidation,” it said “risks remain significant, particularly in light of the continued weakness in the Irish economy".
"The key driver for today's rating action is the growing possibility that following the end of the current European Union-International Monetary Fund support programme at year-end 2013 Ireland is likely to need further rounds of official financing before it can return to the private market, and the increasing possibility that private sector creditor participation will be required as a precondition for such additional support," Moody's said in a statement.
On April 15 last, the rating agency cut Ireland’s credit rating to the lowest investment grade.
"The negative outlook on the ratings of the Government of Ireland reflects these significant implementation risks to the country’s deficit reduction plan as well as the shift in tone among EU governments towards the conditions under which support to distressed euro area sovereigns will be made available," it added.
Irish bank deposits hit junk status