Azerbaijan's high level of foreign assets provides large buffer to mitigate adverse effect from decline in oil prices Moody's
Azerbaijan's high level of foreign assets provides a large buffer to mitigate the adverse effect from the decline in oil prices on the country's economy, says Moody's Investors Service in a new research report.
According to the report, the sovereign has Baa3 foreign and local-currency government bond ratings with a stable outlook. Moody's report is an update to the markets and does not announce a rating action.
the oil price drop has already delivered a significant shock to the oil-reliant Azerbaijani economy and pressured the sovereign's balance sheet. However, Azerbaijan's large stock of foreign assets -- worth roughly $42 billion as of the end of the Q2 2015 – give it time to adjust to lower oil prices,
Azerbaijan's high level of foreign assets provides a large buffer to mitigate the adverse effect from the decline in oil prices on the country's economy, says Moody's Investors Service in a new research report.
The sovereign has Baa3 foreign and local-currency government bond ratings with a stable outlook.
The rating agency notes that the oil price drop has already delivered a significant shock to the oil-reliant Azerbaijani economy and pressured the sovereign's balance sheet. However, Azerbaijan's large stock of foreign assets -- worth roughly $42 billion as of the end of the Q2 2015 – give it time to adjust to lower oil prices, according to the report.
Analyst, a Moody's Assistant Vice President, Sebastian Becker noted that Azerbaijan's sizeable foreign assets enable the government to let fiscal deficits widen during periods of lower oil prices, weaker growth and reduced fiscal revenues.
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