Moody's raises Azerbaijan's rating ceilings on strong reserves, manat stability

Moody's international ratings agency has raised the ceiling of Azerbaijan's country rating for liabilities in national and foreign currencies: from Baa2 to Baa1 for local currency and from Ba1 to Baa3 for foreign currency, Report informs referring to the agency's new rating statement for Azerbaijan.

"Azerbaijan's local and foreign currency ceilings have been raised to Baa1 and Baa3 from Baa2 and Ba1 respectively. The two-notch gap between the local currency ceiling and the sovereign rating balances the large footprint of the government in the economy and still weak institutional governance, against ample sovereign wealth assets that support the country's external and macroeconomic stability. The two-notch gap between the foreign currency ceiling and the local currency ceiling takes into consideration the improving but still significant level of dollarization in the economy and the perceived de facto currency peg against the dollar despite a de jure flexible exchange rate regime, which raise the risk of transfer and convertibility restrictions," Moody's noted.