The international rating agency Standard & Poor's Global Ratings has upgraded Tajikistan's long-term credit ratings on foreign and national currency liabilities from "B–" to "B".
"The agency has assigned the republic a stable outlook," a statement on S&P's official website says.
S&P's long-term "B" credit rating means that the issuer is solvent, but unfavorable economic conditions may affect its ability and willingness to make debt payments.
The agency's analysts explain their assessment by "strong economic growth" and "containment of the budget deficit, which allows us to keep the net debt burden at a level "below a moderate 30% of GDP."
"Although gaps in governance and transparency in state-owned enterprises remain, the new agreement of the International Monetary Fund will help contain the associated risks of contingent liabilities," S&P experts note.
In addition, it is emphasized that access to external concessional financing and relatively sufficient foreign exchange reserves should help the republic meet the requirements for repayment of Eurobonds and mitigate potential pressure on the balance of payments.
According to the Ministry of Finance, Tajikistan's national debt at the beginning of the second half of this year amounted to $3.6 billion, which is equal to 27.5% of GDP. In particular, $3.2 billion (88%) is foreign debt and about $400 million (12%) is domestic debt.
At the beginning of this year, the country's gold and foreign exchange reserves amounted to 5.5 months of import coverage, which, according to the National Bank, exceeds the sufficiency standards of international financial institutions for developing countries.
The vast majority of these reserves are made up of foreign currency, including SDR (Special Drawing Rights – reserve and means of payment of the International Monetary Fund) and an external investment portfolio.
Standard & Poor's, headquartered in New York, is one of the five reputable rating agencies in the world. This organization, on the basis of a bilateral agreement, is engaged in assigning a sovereign credit rating to Tajikistan. Based on the agreement, the agency evaluates the economic situation and the degree of economic security of the country.
The agency's analytical report on the assigned rating is used to attract foreign investment and gives the republic access to international financial markets.
