IslamicFinance.de

S&P dropped a bombshell on Thursday, downgrading the sovereign credit rating for Saudi Arabia by two notches. The ratings agency also slashed credit rating for Brazil, Kazakhstan, Bahrain and Oman as the pain from low oil prices continues to undermine the economic and financial foundations of commodity exporters around the world. The decision to cut Saudi Arabia’s rating was the most striking decision though. As the world’s largest oil-producer, sitting on some of the largest reserves in the world, Saudi Arabia has been a bastion of financial stability for a long time. But it is also has a highly undiversified economy, dependent on oil for nearly all of its export earnings and budget revenues. Last October, S&P cut Saudi Arabia’s rating one level.