Fitch affirms Azerbaijan's rating at 'BB+'

Fitch Ratings has affirmed Azerbaijan's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB+' with a Stable Outlook, Report informs, citing Agency.

"The rating is supported by Azerbaijan's very strong external balance sheet, low public debt, and financing flexibility from large sovereign wealth fund assets. Set against these factors are weak governance indicators and a lack of predictability of economic policy-making, especially in relation to the exchange rate regime, high banking sector dollarisation, and heavy dependence on the hydrocarbon sector.

"The Stable Outlook balances the benefit of high energy prices in further boosting Azerbaijan's external and public finances, with limited prospects of a significant strengthening of the macro-policy framework or implementation of structural reforms to quicken non-oil diversification. Trade exposure to Russia and Ukraine is moderate, with current import disruptions adding to inflationary pressures," said Fitch.