Kazakhstan, Astana, November 8 / A. Maratov /
International rating agency Standard & Poor's yesterday upgraded Kazakhstan's long-term sovereign credit rating in foreign currency from BBB to BBB+ and short-term rating in foreign currency from A-3 to A-2, and confirmed short-term rating of BBB, with a 'Stable' forecast on all the ratings, the press service of the Ministry of Economic Development and Trade of Kazakhstan reported.
"This means that Kazakhstan reached the level of BBB+ as its long-term rating in foreign currency for the first time in its rating history. It is important to note that of the CIS States, Kazakhstan occupies the premier position in Standard & Poor's foreign currency rating and moves from the group BBB consisting of Russia, Bulgaria, Lithuania, Bahrain, Peru, and Mexico, to the higher group BBB+ that includes such countries as Ireland, South Africa, and Thailand. Countries such as Malaysia and Poland stand one level higher - A- - than Kazakhstan, on the long-term rating in foreign currency," the Ministry reported.
As viewed by Standard & Poor's, the upgrading of the rating in foreign currency reflects an improvement of fiscal and external flexibility as a consequence of profitable rapid economic growth due to an increase of oil production and oil prices; prudential fiscal policy and permanently high inflow of foreign direct investments. Such rating is maintained due to the country's steady financial and external balance, large reserves of natural resources and noncyclic inflows of foreign direct investments (FDI).
At the same time, limited money flexibility and the modest pace of economic development with the forecasted GDP per capita of $11,000 for 201 are the factors restraining any rating.
The rating's 'Stable' forecast reflects expectations of Standard & Poor's analysts that high energy prices and state expenditures will stimulate growth and support Kazakhstan's fiscal and external positions.
Kazakhstan's Ministry of Economic Development and Trade regards the upgrading of the country's sovereign credit rating as a positive change of its competitiveness and adequate assessment of the solvency of the Kazakhstan government.
The upgrading of the credit rating contributes positively to the country's international prestige and gives it such advantages as the opportunity of decreasing interest rates on loans borrowed from abroad, potential increase of the value of Kazakhstan's securities, expansion of access to international financial markets and diversification of the base of potential investors and their geography, hence strengthening its competitiveness on international markets.
Sovereign rating is a sort of 'ceiling', under which ratings of all the rest of the issuers acting within its jurisdiction are defined. Once the country's sovereign credit rating is upgraded, ratings of all resident companies may increase and interest rates of international loans assigned to them may decrease.