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Eurozone

Moody's raises Ireland's credit rating to investment grade

Moody's has upgraded Ireland's credit rating from junk to investment grade, the last of the three major ratings agencies to do so. Dublin had already returned to the global bond market after exiting its bailout program.

The Irish economy now has a positive outlook, after years of tax hikes and spending cuts aimed at bringing the country's finances under control, according to a forecast published by the Moody's ratings agency on Friday.

Last December, Ireland successfully sponsored by the European Union and International Monetary Fund (IMF), which kept the country's economy afloat while it was locked out of the international bond market. Dublin was forced to seek a bailout in 2010, after its economy had been crippled by both a banking crisis and real estate market collapse.

Recognizing Dublin's progress, Moody's upgraded Ireland's credit rating from Ba1, considered junk status, to an investment grade Baa3. That means Moody's now considers Irish government bonds a relatively safe investment.

'Major improvement in investor sentiment'

"The decision by Moody's to upgrade Ireland's credit rating reflects the significant progress that has been made in stabilizing the public finances, restructuring the banking sector and, most importantly, growing the economy and creating jobs," Irish Finance Minister Michael Noonan said in a press release on Friday.

"Ireland is now rated at investment grade by all of the major credit rating agencies, highlighting the major improvement in investor sentiment towards Ireland," Noonan said.

The two other major ratings agencies, Standard & Poor's and Fitch, had already given Ireland an investment-grade rating of BBB+.

Last week, Ireland issued 10-year bonds on international capital markets for the first time since its December exit from the EU-IMF bailout program. Dublin successfully raised 3.75 billion euros ($5.1 billion) during that auction.

slk/jm (AFP, Reuters)

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