S&P expects Kazakhstan's gov't and external balance sheets to remain robust

Business Materials 11 March 2019 10:17 (UTC +04:00)

Baku, Azerbaijan, Mar. 11

By Rashid Shirinov – Trend:

S&P Global Ratings has affirmed its 'BBB-/A-3' long- and short-term foreign and local currency sovereign credit ratings on Kazakhstan, Trend reports via a message by the rating agency. The outlook is stable.

The agency has also affirmed its 'kzAAA' national scale rating on Kazakhstan. The transfer and convertibility assessment on Kazakhstan remains 'BBB'.

“The stable outlook reflects our expectation that, over the next two years, Kazakhstan's government and external balance sheets will remain robust,” S&P Global Ratings noted.

The rating agency may raise the ratings if Kazakhstan’s monetary policy effectiveness improves significantly, for example due to a material strengthening of the banking system, including further improvements in regulatory oversight and reduced concentration in lending to single borrowers.

“A prolonged and sharp fall in oil prices or production, beyond our expectations, could put the ratings under pressure if it led to deterioration of Kazakhstan's external performance, for example should gross external financing needs exceed 100 percent of current account receipts plus usable reserves,” reads the message.

S&P Global Ratings may also consider a downgrade if destabilizing factors reemerge, such as a spike in resident deposit dollarization.

The rating agency expects that Kazakhstan’s economic growth will be at 2.9 percent in 2019, compared with the previous forecast of 3.5 percent, owing to lower oil production because of OPEC cuts, which will coincide with maintenance works at the Kashagan field.


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