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Moody's warns World Bank's triple-A rating threatened if Trump pulls support
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Moody's warns World Bank's triple-A rating threatened if Trump pulls support
Feb 10, 2025 9:45 AM

LONDON, Feb 10 (Reuters) - The triple-A ratings of the

World Bank and other top multilateral lenders would be at risk

if U.S. President Donald Trump slashed his country's support for

them, credit rating agency Moody's has warned.

Last week, Trump signed an Executive Order to review U.S.

government support to all international intergovernmental

organisations of which it is a member and to withdraw from some

United Nations organisations.

"The US is a key shareholder in a number of rated MDBs

(multilateral development banks), hence it would be credit

negative if it materially reduced its commitment to them,"

Moody's said in a report published on Monday.

The U.S. is the single biggest shareholder in the World Bank

Group's institutions, with a 16.4% share in its largest, the

International Bank for Reconstruction and Development (IBRD),

and a 19% stake in International Development Association (IDA)

which provides concessional loans and grants to the world's

poorest countries.

It has an even higher 30% share in the Inter-American

Development Bank in Latin America, a 15.6% stake in the Asian

Development Bank and 10% in the European Bank of Recontruction

of Development that was set up in the wake of the Cold War.

The Trump-ordered review of Washington's support for

development banks is due to take roughly six months.

The set-ups of most of the institutions allow for an

"orderly withdrawal" of a shareholder.

In the World Bank's case, the U.S. has paid in capital

of around $3.7 billion in the IBRD and has callable capital

commitments of $49.2 billion, compared to disbursed and

outstanding IBRD loans and guarantees of around $263 billion.

The average maturity of the IBRD's loan portfolio is 8.4

years although some loans are for up to 50 years meaning that,

"the US would remain on the hook for IBRD's lending portfolio

for many years to come," Moody's said.

A withdrawal would also open the door for other

countries to fill the void, something unlikely to fit with

Trump's geopolitical strategy.

"Those shareholders in particular include China, which

has long coveted a larger share in the IBRD, a desire strongly

opposed by consecutive U.S. governments," Moody's said.

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