Moody's keeps France's Aa3 rating with negative outlook

Moody's refrained from any rating action on French sovereign debt on Friday, maintaining its Aa3 rating with a negative outlook. The decision defied widespread expectations of a downgrade. The maintenance of the rating, which would have otherwise aligned France with ratings from Fitch and S&P, was welcomed by Prime Minister Sébastien Lecornu as disproving "declinist forecasts." Moody's stated the publication does not announce a credit rating action or indicate the likelihood of one in the near future. Moody's noted the Aa3 rating assumes a 2027 budget reducing the deficit will be adopted, while financing costs and social tensions moderate. The decision comes as the budget is being constructed in Parliament and the country anticipates a new day of potential violence and looting on Saturday.