Moody’s analyzes Azerbaijan’s potential economic risks

Finance Materials 17 February 2020 12:36 (UTC +04:00)
Moody’s analyzes Azerbaijan’s potential economic risks

BAKU, Azerbaijan, Feb. 17

By Eldar Janashvili - Trend:

Moody's Investors Service, the international ratings agency, has affirmed Azerbaijan’s issuer credit rating at Ba2, Trend reports referring to Moody’s report.

Azerbaijan’s sovereign rating has been affirmed at Ba3, according to the report.

The credit profile of Azerbaijan (issuer rating Ba2) reflects the country's "ba3" economic strength, which balances moderate wealth levels against high growth volatility and the economy's significant exposure to hydrocarbons, according to the report.

The country’s "b2" institutions and governance strength that takes into account weaknesses in control of corruption and rule of law, are balanced against gradually increasing monetary and fiscal policy credibility, reads the report.

The government's "a3" fiscal strength is underpinned by the country's strong net creditor position, as the size of sovereign wealth assets covers all of the government's direct debt and guarantees, notwithstanding the high share of foreign currency debt, the report said.

The analysts believe that "ba" susceptibility to event risks is driven by geopolitical risk, as well as domestic political risk, while banking sector risk remains material owing to lingering weakness in the sector.