The Fitch Ratings International rating agency confirmed the long -term rating of the Azerbaijani issuer (“RDE”) in foreign currency at the BB+level, the report prepared by the Agency.
The agency’s message indicates that the forecast is changed from “stable” to “positive”.
According to Fitch, the rating is supported by a very strong external balance of Azerbaijan, low state debt and high financial flexibility due to large assets of the sovereign welfare fund.
According to Fitch, high oil and gas prices further strengthen the sovereign balance of Azerbaijan. “At the end of June 2022, the strategic reserves of Azerbaijan are estimated at $ 52.6 billion, of which 86% falls on assets of the state neftefond (GNFAR). We predict that the pure position on the sovereign assets of Azerbaijan will grow by 14.3 pp in 2022- 2024 – up to 77.6% of GDP, which is the highest indicator in the group of comparable countries, ”the agency’s statement quotes Interfax -Azerbaijan.
Fitch notes a stable improvement in the indicators of the banking sector of Azerbaijan. In particular, underwear loans at the end of the first half of 2022 account for 3.5% (6.1% at the end of 2021), the adequacy of capital of the first level is 16.1%, the dollarization of deposits and deposits decreased to 49.3% in August from 60.4% in the first half of 2020, the sector remains profitable.
According to the agency, further strengthening the external balance, for example, due to high energy prices, increasing the efficiency and predictability of the economic policy of Azerbaijan, are factors that can lead to an increase in the country’s credit rating.