“While a short-term conflict may have an impact on credit, the longer and more intense a military conflict is, the greater its impact on the effectiveness of policies, public finances and the economy,” Moody’s said.
The cost of insuring the Israeli government’s debts using what are known as sovereign credit swaps recorded a significant jump. Investors use credit default swaps either as a protection or speculative tool, and last week the cost of buying swaps for Israel rose 80 percent.
Israel’s rating has never been downgraded by any of the three main rating agencies: Standard & Poor’s Global, Moody’s and Fitch.
Earlier this week, Fitch put Israel on negative review and warned that any significant escalation of the conflict could lead to a rating downgrade.
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