S&P keeps stable Azerbaijan's international credit rating
- 29 April 2020
According to S&P international rating agency the ratings on Azerbaijan remain at 'BB+/B' with a stable outlook, APA-Economics reports citing the Agency.
The Agency assume an average Brent oil price of $30 per barrel (/bbl) in 2020, recovering to $50/bbl in 2021 (see "S&P Global Ratings Cuts WTI And Brent Crude Oil Price Assumptions Amid Continued Near-Term Pressure," published March 19, 2020). Azerbaijan's strong external balance sheet will remain a core strength, reinforced by the large amount of foreign assets accumulated in the sovereign wealth fund, SOFAZ (about $41.3 billion as of March 31, 2020, compared with the country's nominal GDP of about $48 billion at year-end 2019).
Amid the volatile oil price environment, pressure on the manat has increased. In their view, if oil prices remain low for a prolonged period, the authorities could allow the exchange rate to adjust to avoid a similar substantial loss of foreign currency reserves, as happened in 2015. In such a case, there will be an additional blow to the banking sector.