Fitch Ratings downgraded Mozambique's foreign-currency debt by one notch to CC, indicating the nation is on the brink of default. The rating agency cited increasing likelihood that Mozambique will restructure its sole dollar bond, a move that would mark the country's second major debt crisis in less than a decade. Investors now face heightened uncertainty about recovering their investments.

Mozambique's CC rating places it among riskiest sovereign credits globally, signaling substantial default risk. The downgrade reflects mounting pressure on the country's finances as bond restructuring appears imminent rather than speculative. This development follows Mozambique's history of debt troubles, which previously required international assistance and austerity measures.

The rating cut immediately impacts Mozambique's access to international capital markets and increases borrowing costs for the impoverished nation. Holders of the country's dollar bonds face potential losses as restructuring would likely involve reduced repayments or extended maturity periods. Market participants will closely monitor any official announcements from Mozambique regarding its debt strategy.