BAKU, Azerbaijan, Jan. 21
By Eldar Janashvili - Trend:
Azerbaijan has maintained a stable position at Ba2 level in the outlook for sovereign creditworthiness in 2020 in the Commonwealth of Independent States (CIS) by Moody’s Investors Service rating agency, Trend reports referring to the rating agency.
Reforms in the financial sector were aimed at reducing the credit risk of the population and restoring the issuance of loans, according to the report.
Moody’s report said that in comparison with other CIS countries, the outlook for which is generally negative, Azerbaijan has stable prospects at a level of Ba2, continuing recovery and stabilization following the large commodity price-driven shock over 2014-16 that weakened credit fundamentals and drove a wave of downgrades in the region.
Reforms are starting to feed through into stronger institutions and governance, reads the report.
Azerbaijan introduced official inflation targeting, along with inflation guidance, for the near and medium term, according to the report.
“Effective use of these tools can expand policy buffers – such as by allowing the currency to be a shock absorber for the economy – and foster confidence in domestic policymaking and the local economy,” the report said.
“Authorities are also aiming to transform existing economic structures by diversifying away from hydrocarbons,” Moody’s noted. “Doing so should increase the attractiveness of these countries as investment destinations and spur longer-term economic development and resilience.”
Moody’s regularly assesses financial reforms in Azerbaijan and in the agency’s previous report, the government’s initiative to address the issue of problem loans was highly appreciated.