Moody’s downgraded Mozambique’s local-currency long-term issuer rating to Caa3, citing severe liquidity challenges due to difficulties in refinancing debt and fiscal pressures exacerbated by political and social unrest following the October elections. The foreign-currency rating was affirmed at Caa2, with expectations that Mozambique will prioritize Eurobond repayments. The government’s debt service remains manageable until the Eurobond matures, providing time for a repayment strategy, with support from an LNG project restart or further IMF engagement.