Ceasefire in Lebanon: Moody's Wait-and-See Approach on Israel's Credit

Israel's ceasefire deal with Hezbollah could influence its credit rating, though Moody's remains cautious. While the truce offers temporary relief, Israel's bonds saw improvements. Yet, Moody's maintains a negative outlook due to ongoing domestic political risks, social tensions, and uncertain economic growth, despite diminished geopolitical threats.

Israel's recently brokered ceasefire deal with Hezbollah could potentially impact its sovereign credit rating, though Moody's remains circumspect on significant improvements. The truce provides relieved investors with hope, but caution prevails.

Moody's downgraded Israel's credit to Baa1 in September after the war in Gaza, citing elevated risks. While the ceasefire led to a brief rally in bonds, Moody's still holds a negative outlook for Israel, spotlighting domestic unrest.

Despite partially diminished geopolitical threats, ongoing disputes over judicial reforms and military exemptions for ultra-Orthodox Israelis amplify social tensions and uncertainties in forecasting stable economic growth, hinting at potential future downgrades.

(With inputs from agencies.)