Lebanon’s credit rating was cut one level further into junk territory by Moody’s Investors Service on Tuesday as protests roil the nation, reflecting the increased likelihood of debt rescheduling or other steps that may constitute a default.

Moody’s analyst Elisa Parisi-Capone said the viability of the currency’s peg to the U.S. dollar and macroeconomic stability are both threatened by mass protests and a loss of investor confidence. Moody’s downgraded Lebanon’s long-term foreign debt to Caa2 and said the rating remains on watch negative, meaning more cuts may be in store.

Lebanese debt has lost investors 18% so far this year, a collapse exceeded only by Venezuela and Argentina. Bonds maturing in 2027 extended the day’s drop to 4.8% after the decision, the worst performance among emerging-market sovereign bonds.

“Widespread social protests and the recent resignation of the government have diminished the likelihood of the passage of the 2020 budget and implementation of the agreed reforms necessary to unlock confidence,“ Parisi-Capone wrote.

Thousands of protesters have been on the streets for weeks in Lebanon, demanding the resignation of a political class that they say has left the country on the verge of bankruptcy, leaving little for public services. In an effort to boost liquidity and stave off possible downgrades, Lebanon’s central bank instructed local lenders to raise their capital by 20% by next June.