Ireland's credit rating further downgraded

Ireland's international credit rating has been downgraded again by the Standard and Poor's ratings agency.

The decision is based on the rising cost to the Government of supporting the banking sector.

"The projected fiscal cost to the Irish government of supporting the Irish financial sector has increased significantly above our prior estimates," S&P said in a statement.

The agency had already trimmed their Irish rating from AAA to AA+ last year. It has now been slashed to AA-.

And it says the ratings outlook is negative, suggesting that a further downgrade is possible if costs continue to rise.

Responding, the National Treasury Management Agency (NTMA) said that Ireland still maintains an AA (Double A) rating from all five of its rating agencies – Moodys, Fitch, S&P, R&I and DBRS.

"The AA rating is defined by S&P as meaning that a borrower has a 'very strong capacity to meet financial commitments'," NTMA said.

"The rating applied to Ireland today by S&P is higher than its ratings for Portugal, Italy and a number of other EU countries."

"We also note that S&P acknowledges the Government’s 'proactive and transparent approach” to dealing with the financial sector and that it believes this will 'help foster a gradual recovery of the Irish economy over the medium term."