Moody's sharply cut Oman's sovereign credit rating on Saturday, just weeks before the country may launch its first international bond issue in nearly 20 years, citing damage to state finances from low oil prices. Moody's lowered Oman by two notches to A3 and kept the rating on review for a further downgrade, saying the country, a small exporter of crude, had fewer financial reserves than its rich neighbours to cope with an era of cheap oil. "Oman has a comparatively weaker asset cushion, with government financial assets amounting to only about three years of spending," the ratings agency said. In 2016, Oman's current account deficit will reach almost 25 percent of gross domestic product, improving only slowly to a deficit of 16 percent by the end of 2018, Moody's said.   Its new rating for Oman is three notches above an assessment by Standard & Poor's, which 10 days ago lowered the country two notches to BBB-minus, one notch above junk status. Credit ratings have become more important to Oman as the state budget deficit opened up by low oil prices has strained liquidity in the domestic banking system, forcing the government to consider returning to the international debt market. Oman is in talks with banks about a sovereign U.S. dollar bond issue that could take place as soon as the second quarter of this year, sources aware of the matter told Reuters this week. The central bank's executive president Hamood Sangour al-Zadjali said this month that the government might issue bonds by the middle of this year as part of a plan to borrow up to USD10 billion from abroad. (Reuters)