S&P may upgrade Azerbaijan’s sovereign credit ratings
BAKU, Azerbaijan, Jan. 27
By Eldar Janashvili - Trend:
S&P Global Ratings, an international rating agency, may upgrade Azerbaijan’s sovereign credit ratings, Trend reports referring to the rating agency.
“We could consider an upgrade, if external surpluses were higher than base-line projections, resulting in a faster accumulation of government fiscal assets,” the report said. “This could happen, for example, if hydrocarbon prices markedly increased in contrast to our assumptions, and we expected the increase to not be temporary.”
Upside to the ratings could also build on the basis the reforms, addressing limited economic diversification and substantial constraints to monetary policy effectiveness, according to the report.
S&P Global Ratings affirmed its long- and short-term foreign and local currency sovereign credit ratings on Azerbaijan at 'BB+/B'.
The ratings reflected significant foreign assets accumulated in the sovereign wealth fund, the State Oil Fund of the Republic of Azerbaijan (SOFAZ), still-weak institutional effectiveness, monetary policy flexibility, and strong fiscal and external net asset positions.