Majority of Emerging Market Economies Retain Currency Rating :Moody's

Business Materials 7 November 2008 13:37 (UTC +04:00)

Azerbaijan, Baku, 7 November / Trend / Most emerging market economies are unlikely to experience sovereign rating pressures over the short term. This is because the shortage of foreign currency funding in the world economy is temporary, says Moody's Investors Service in a new Special Comment entitled "Rating Sovereigns During a Global 'Sudden Stop' in International Funding".

"The turmoil in the financial markets evolved in October from a crisis that was initially largely confined to sophisticated western financial systems, to a crisis that can be characterized as a global 'sudden stop," says Pierre Cailleteau, Team Managing Director of Moody's Global Sovereign Risk Group. For sovereign analysts, this interruption in international financing brings back to balance-of-payment basics.

Moody's concludes that the majority of emerging market economies are not likely to experience rating pressures over the short term, because they have accumulated sufficient reserve buffers, or they have access to a level of non-market funding (bilateral, regional or multilateral assistance).