Nepal has secured a ‘Double B Minus’ (BB-) sovereign credit rating based on its strong foreign exchange reserves and economic growth projections. The current rating underscores that Nepal imposes no significant restrictions preventing the private sector from converting local currency into foreign currency or transferring funds to non-resident creditors for debt payments.
The rating is one of the best in South Asia after India.
‘BB-‘ ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists that supports the servicing of financial commitments.
| What is a sovereign credit rating?
A sovereign credit rating is the assessment of a country’s credit worthiness which reflects the level of risks associated with lending. |
The sovereign credit ratings are used by the global investors and financial service providers to assess a country’s investment environment. These ratings work by evaluating the structure and condition of a country’s economy through the lens of expert analysis, presenting the real economic situation to investors world wide.
So far, the government and private sector of the country have considered the rating satisfactory. The fact that Nepal became willing to have its economy examined objectively on a global scale also proves its commitment to economic transparency and shows appetite for investments.
