BAKU, Azerbaijan, Apr. 7
By Zeyni Jafarov - Trend:
The change in the forecast on the sovereign rating of Azerbaijan from ‘stable’ to ‘positive’ by the Moody’s international rating agency was facilitated by the increase in the effectiveness of the economic policy pursued in Azerbaijan, Gulnara Haydarshina, Deputy Head of the Market Analysis Department of Gazprombank, told Trend.
According to Haydarshina, this decision will help improve the issuer's credit profile in the medium term.
This will especially affect progress in the conduct of macroeconomic and monetary policies, which will enhance the economy's resilience to external shocks, as well as the effective use of significant fiscal buffers, which reduce the risk of deteriorating budget indicators and debt burden, she added.
Also, the Gazprombank representative noted that Azerbaijan is distinguished by the highest provision of international reserves in the CIS, which at the beginning of April amount to at least $50 billion and provide coverage for 58 months of imports, a low debt burden, the expected return of the country's economy to a growth, which in 2021 could be 5.1 percent, maintaining macroeconomic stability and the availability of sufficient resources to keep a stable exchange rate of the manat in the medium term.
Considering these factors, Azerbaijan looks positive as a sovereign issuer, Haydarshina emphasized.
She added that the positive rating actions of Moody’s and the prospects for the return of Azerbaijan’s sovereign rating to a level comparable to the rating group ‘BB+’ by S&P and Fitch agencies are favorable for Azerbaijan's Eurobonds and create the potential to reduce their yields.
Earlier, Moody’s confirmed the long-term rating of the issuer and the rating of the priority unsecured obligations of Azerbaijan at the level ‘Ва2’. This outlook reflects the assessment that governance and, in particular, policy effectiveness are improving, albeit from a low base, which could improve the resilience of the government's credit profile.
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