Following downgrade of Kazakhstan's rating by S&P the cost of foreign borrowing may soar - Ministry of National Economy
Astana. February 20. KazTAG - The cost of external loans attraction may soar following the downgrade of Kazakhstan's rating by the Standard&Poor's agency, reports the Ministry of National Economy.
"The cost of external loans attraction may increase in the result of the rating downgrade by Standard&Poor's agency," reports the official reply of the Ministry to KazTAG’s request.
According to the Ministry of National Economy, the sovereign credit rating of Kazakhstan shows the state's ability to respond the consequences , including to cover the debt.
"It is worth indicating that the level of state debt of Kazakhstan is not high and the sovereign rating is on the first place in the CIS. Taking in account declination of the world economy and similar ratings downgrade of other states, we believe that downgrade of S&P rating will not considerably affect the economic situation of Kazakhstan and its position in the world," said the Ministry.
In our view, the downgrade of long term sovereign credit ratings of Kazakhstan in foreign and national currencies from "BBB+" to "BBB", according to the international methodology, "means sufficient ability of Kazakhstan to perform its financial liabilities, and at the same time higher sensibility to the effects of unfavorable economic conjuncture".
"It is worth indicating that taking in account sufficiency of accumulated reserves, no closing of foreign markets is planned. (...) However, these changes are connected, first of all with drop of oil price, although investors may use credit ratings while taking decisions, the ratings of Standard & Poor's are not the indicators of investments quality," said the Ministry.