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Credit Agency Slashes Libya's Rating

An investor watches the situation in Libya, with Libyan leader Moammar Gadhafi seen on a television screen, at the Amman Stock Exchange, February 27, 2011

A major international credit agency has cut Libya's rating for the second time in just over a week, citing the increasing political turmoil that has left hundreds dead.

Fitch Ratings says Libya's debt is below investment grade, and warns it may cut the rating again if conditions deteriorate further.

The agency says Libya's oil exports have been cut in half and noted that many of the foreign workers who play a key role in this vital industry have fled the country. In the sharp downgrade, the agency also considered efforts to freeze major foreign assets belonging to the family of Libyan leader Moammar Gadhafi.

The report's authors say Libya's long-term economic health is "encouraging" because of its oil wealth, lack of debt, and a government investment fund valued up to $140 billion.

Some information for this report was provided by AP, AFP and Reuters.