The government has decided to hire two global rating agencies--Standard and Poor's (S&P) and Moody's Investor Services--for three more years to review sovereign credit rating of Bangladesh that is crucial particularly for foreign investment.
Officials said the Ministry of Finance (MoF) recently gave its nod to a central bank proposal for appointing the two agencies for 2015, 2016 and 2017.
These two rating agencies will be paid a total of US$451,375 for the task. A senior official of the central bank will sign an agreement with officials of the two agencies soon to this effect.
A senior MoF official told the FE the Standard and Poor's and Moody's Investor Services had reviewed Bangladesh's sovereign credit ratings for several years. Since last year, another agency, 'Fitch Ratings Inc', has also been doing a review of the country's creditworthiness.
However, until now, Fitch Ratings Inc has done the task voluntarily. The agency's officials recently contacted the central bank to visit Bangladesh again to carry out the review for 2015, the MoF official said.
He said global investors give a look on sovereign credit ratings of any country before making investment decision. In this case they weighs ratings reviewed by world-renowned Standard and Poor's and Moody's Investor Services.
The official said the review done by Fitch Ratings Inc' for 2015 was almost similar to ones done by Standard and Poor's and Moody's Investor Services.
He said the government will examine the standard of review done by Fitch Ratings Inc and may hire the agency in the future if its fee is found reasonable.
With 26 offices around the world and a history that dates back more than 150 years, Standard and Poor's Ratings Services provides high-quality market intelligence in the form of credit ratings, research, and thought leadership, the agency said on its website.
The Moody's Investors Service website shows it as a leading provider of credit ratings, research, and risk analysis. Moody's commitment and expertise contribute to transparent and integrated financial markets, protecting the integrity of credit. On the other hand, Fitch Ratings Inc, established way back in 1914, is a global leader in credit ratings and research. It is one of the three nationally recognised statistical rating organisations designated by the US Securities and Exchange Commission in 1975.
In April this year, after reviewing Bangladesh's credit ratings for 2014, Moody's said the country's credit profile was supported by strong and stable growth.
Bangladesh's Ba3 foreign currency government bond rating reflects its track record of macroeconomic stability, a modest debt burden, and limited external vulnerabilities with an ample foreign-reserve buffer, it noted.
Standard and Poor's in May this year reaffirmed the BB rating and projected a 'stable outlook' for the Bangladesh economy for the sixth consecutive year.
"We are affirming our 'BB-/B' foreign and local currency sovereign credit ratings on Bangladesh," it said in a research update.
While releasing its review report early June this year, Fitch Ratings said Bangladesh with 'BB-/Stable' rating may struggle to meet some key revenue and growth targets set out in its FY2015-16 budget.
"The targets are highly ambitious, while continued political tensions point to significant implementation challenges," the agency said.
syful-islam@outlook.com
S&P, Moody\\\'s to be hired for three more years
Syful Islam | Published: July 25, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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