Fitch Ratings affirmed Libya's long-term foreign and local currency Issuer Default Rating at 'BBB+', with a stable outlook. The firm also affirmed the short-term foreign currency IDR at 'F2.'

Charles Seville, Associate Director in the Sovereign group at Fitch said, Libya's 'BBB+' rating balances zero government indebtedness and a formidable external balance sheet against economic reliance on oil, the challenges of modernizing the country's economy, and political-institutional factors.

The firm noted that Libya's ratings could benefit from a further strengthening of the external balance sheet, and successful handling of the challenges posed by lower oil prices. Similarly, progress on economic reforms and development of the private sector could also support Libya's ratings. A more secure legal foundation for the Libyan Investment Authority would also affect the rating action positively, the firm said.

At the same time, Fitch said the downside rating risks included a prolonged period of lower oil prices, as also a significant relaxation of the fiscal stance, or a political shock.

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