Fitch Ratings is going to start conducting the sovereign credit rating of Nepal soon. The government has picked American rating agency so that it can help pave the way to assess the creditworthiness of Nepal.
Revenue secretary Shishir Kumar Dhungana confirmed that the government has decided to select Fitch Ratings to determine the creditworthiness and risk assessment of the country. Nepal has been unable to attract more foreign direct investment (FDI) also due to lack of country ratings.
The country credit rating will not only provide foreign investors insights into the level of risk associated with investment but also help the government access capital from the international market on the basis of its creditworthiness as the sovereign credit rating determines the trustworthiness of the business environment and credit risk of a potential debtor, an individual, company, business, government or any other sovereign entity. The rating also gives potential investors an insight into the level of risk while investing in a country and takes into account political, social and financial risks. Risk ranking of a country is the primary factor that the potential investors look at before investing in any country.
Though, Moody’s Investor Services and Standard and Poor’s were also eyeing Nepal’s ratings, the Finance Ministry chose Fitch Ratings for the sovereign credit rating due to its technical and financial proposal,” he said, adding that the global credit rating agency will provide report and rating within 2 months after the signing of an agreement, if it gets all the necessary documents and information. “But it will take nearly 1 month to carry out homework before the ministry sign the agreement with Fitch Ratings.”
According to him Nepal will have sovereign credit ratings within 12 weeks. “Credit rating not only helps foreign investors measure the risk of the country either to invest or issue credit to it, but also provides an opportunity to review the progress and shortcomings in various aspects of the economy,” he said, adding that it will also put pressure on government to carry out necessary reforms to make sure Nepal will have better credit rating. Fitch Ratings conducts the credit rating of a country based on its macroeconomic, structural and governance indicators.
While assigning a rating, which can stretch from ‘AAA’ at the top – high quality – to D – defaulted – Fitch Ratings factors in various indicators like inflation rate, economic growth, foreign direct investment and external debt.
Fitch Ratings will carry out works related to the sovereign rating – to gauge Nepal’s credit worthiness – in coordination with the Department for International Development (DfID), United Kingdom.
Revenue secretary Shishir Kumar Dhungana confirmed that the government has decided to select Fitch Ratings to determine the creditworthiness and risk assessment of the country. Nepal has been unable to attract more foreign direct investment (FDI) also due to lack of country ratings.
The country credit rating will not only provide foreign investors insights into the level of risk associated with investment but also help the government access capital from the international market on the basis of its creditworthiness as the sovereign credit rating determines the trustworthiness of the business environment and credit risk of a potential debtor, an individual, company, business, government or any other sovereign entity. The rating also gives potential investors an insight into the level of risk while investing in a country and takes into account political, social and financial risks. Risk ranking of a country is the primary factor that the potential investors look at before investing in any country.
Though, Moody’s Investor Services and Standard and Poor’s were also eyeing Nepal’s ratings, the Finance Ministry chose Fitch Ratings for the sovereign credit rating due to its technical and financial proposal,” he said, adding that the global credit rating agency will provide report and rating within 2 months after the signing of an agreement, if it gets all the necessary documents and information. “But it will take nearly 1 month to carry out homework before the ministry sign the agreement with Fitch Ratings.”
According to him Nepal will have sovereign credit ratings within 12 weeks. “Credit rating not only helps foreign investors measure the risk of the country either to invest or issue credit to it, but also provides an opportunity to review the progress and shortcomings in various aspects of the economy,” he said, adding that it will also put pressure on government to carry out necessary reforms to make sure Nepal will have better credit rating. Fitch Ratings conducts the credit rating of a country based on its macroeconomic, structural and governance indicators.
While assigning a rating, which can stretch from ‘AAA’ at the top – high quality – to D – defaulted – Fitch Ratings factors in various indicators like inflation rate, economic growth, foreign direct investment and external debt.
Fitch Ratings will carry out works related to the sovereign rating – to gauge Nepal’s credit worthiness – in coordination with the Department for International Development (DfID), United Kingdom.
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