Fitch affirms Kazakhstan at 'BBB'

Fitch Ratings has affirmed Kazakhstan's Long-Term Foreign and Local Currency Issuer Default Ratings at 'BBB' with a Stable Outlook, the agency said.

The issue ratings on Kazakhstan's senior unsecured foreign currency bonds are also affirmed at 'BBB'. The Country Ceiling is affirmed at 'BBB+' and the Short-Term Foreign-Currency and Local-Currency IDRs at 'F2'.

“The economy is gradually adjusting to a significant shock caused by lower oil prices and weaker demand in key trading partners,” the agency said. “Economic growth is resuming and the erosion of the strong sovereign balance sheet, which underpins the ratings, is slowing. The banking sector is a significant weakness compared with peers.”

According to Fitch, greater exchange rate flexibility is supporting the adjustment of the balance of payments, with official reserves rising $3.5 billion over the first nine months of 2016, to $31.4 billion.