BAKU, Azerbaijan, April 1. Fitch Ratings, the international rating agency, has confirmed Azerbaijan's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB+' with a Positive Outlook, Trend reports via the agency.
"The rating is supported by a very strong external balance of Azerbaijan, the lowest public debt in the group of analogs, as well as the funding flexibility via major assets of the sovereign wealth fund," the agency said.
According to the agency, the Positive Outlook reflects the enhancement of external and fiscal buffers due to high energy prices, as well as greater restrictions on spending, which will be supported by the consistent application of the restored budget rule.
In addition, Fitch forecasts an increase in the net asset position of Azerbaijan's sovereign creditors by 10.9 percentage points in 2023-2024 to 68.7 percent of GDP, which is the highest indicator in the rating peer group.
The agency also notes a steady improvement in the banking sector indicators of Azerbaijan. Moreover, Fitch analysts believe that the supervision of banking regulators is improving.
"The ratio of overdue loans at the end of 2022 decreased to 2.9 percent (6.1 percent at the end of 2020), while the return on average capital was 17.3 percent. At the same time, the adequacy capital of the first level that is at the sufficient level, declined by 15.2 percent, while deposits and their dollarization decreased to 48 percent in 2022", the agency said in the statement.
Fitch Ratings Inc. is one of the world's most reliable rating agencies. Its purpose is to deliver business intelligence to make better decisions and reduce business risks for its clients.