Analytics, Economics, Estonia, Investments, Rating

The short-term foreign currency bond and deposit ceilings remain unchanged at P-1. Moody’s also cut the ratings of Malta and Slovakia. The agency explained the decision with insecurity caused by the debt crisis.

"Estonia's economy is small and extremely open compared with that of most 'A'-rated peers and is correspondingly vulnerable to external shocks," wrote Moody’s." However, these challenges are offset by the country's moderately high wealth and longer-term prospects for gradual economic convergence with the core euro area. Estonia scores strongly on international governance surveys and in our view, Estonia's institutions have demonstrated exceptional flexibility and determination over the past three years. Moreover, Estonia's commitment to euro adoption is a good example of its institutional strength, particularly as it met the necessary targets under especially difficult circumstances," Moody’s said.

The sovereign ratings of the three countries remained unaffected by these changes, Moody’s said. Moody’s affirmed the government debt rating of the Estonia at A1 and stable outlook in July 2012.