Rating agency Moody's has downgraded Ireland's foreign and local currency government bond ratings to junk status in the latest crisis for the Eurozone.

Moodys downgraded the government bond ratings one notch to Ba1 from Baa3, with a negative outlook.

The rating agency said the move had been prompted by a 'growing possibility' that Ireland would require further bail-outs after the current European Union/International Monetary Fund programme after 2013.

Ireland was likely to require further assistance from the programme before it can return to the private market.

Moody's did acknowledge 'strong commitment' by the Irish to fiscal consolidation but waned on implementation risks and the weak Irish economy.

In its report, Moody's argued that there was a much lower risk of restructuring than Greece but warned that it may find it difficult to regain market access to private sector on sustainable terms.

The rating agency has also downgraded the long-term rating of the National Asset Management Agency, which has its debt guaranteed by the Irish government.

It warned a further downgrade could be on the cards if the government fails to meet targeted fiscal consolidation goals or if the economic outlook deteriorates.

However, a return to sustained economic growth and the adherence to its fiscal consolidation plans could see an upgrade on the horizon.

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