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Moody's Investors Service on Wednesday raised to "positive" from "stable" the outlook on Israel's key foreign-currency ratings, saying the country has shown "remarkable resiliency" in meeting the numerous challenges of the last few years.
"Israeli institutions have proved to be extremely robust in the face of considerable external and internal shocks, including global recession, the incapacitation of Prime Minister Ariel Sharon, the reformulation of the political spectrum, and repeated terrorist threats and actions. When combined with the unusual sources of financial assistance afforded by various programs of the US government and Israelis and Jews living outside Israel, the result over time may imply a diminution of credit risk," the ratings agency said.
The outlook change affects Israel's foreign-currency ceiling, its foreign-currency government bonds (not guaranteed by the US government), its foreign-currency bank deposit ceiling, and its local-currency bonds (all currently rated "A2"). Israel's local-currency bank deposit ceiling ("Aa2") and its local currency guideline ("Aa1") have a "stable" outlook and were not affected by the rating action.
Moody's also noted that Israel was exhibiting considerable growth of gross domestic product per capita (purchasing power parity basis), moving towards a level more often associated with advanced economies than with developing ones.