Having experienced the vicious cycle of credit rating agency downgrades following the loss of its AAA status, Ireland is now benefiting from the virtuous cycle of rating upgrades. The relentless cycle of falling ratings being followed by increased borrowing costs that in turn lead to further downgrades is now replaced by improving ratings , falling borrowing costs and rating upgrades.

The remarkable fall in Irish bond yields that this reflects delivered another dividend yesterday with political agreement reached in Europe for Ireland to avail of favourable market rates to refinance our debt with the IMF. The estimated €400 million annual saving in interest costs bolsters the case for another upgrade.

As luck would have it yesterday was also one of the three days in the year that Moody’s is permitted to make public any changes to Ireland’s sovereign rating. The restrictions were put in place following the chaos of the credit crunch in order to try to break the sort of vicious cycle that did such damage to Ireland.

French bank BNP Paribas yesterday observed “that a ratings upgrade for Ireland is justified but unlikely to come given that Moody’s gave a two-notch upgrade to Ireland in May. It is unclear if news on the IMF loans comes too late to impact Moody’s planned rating action but it further strengthens the case for an upgrade.”

It would seem then that Ireland will have to wait for the next date in Moody’s calender – mostly likely mid-January next year – to reap the rewards of yesterday. Thus a measure put in place to protect countries in difficulties from market panic is now preventing one from benefiting from market enthusiasm .

But hopefully by the time January rolls around there will have been even more good news for Moody’s to feed into its ratings calculations.