Standard & Poor’s, one of the “Big Three” international rating agencies, for the first time assigned a sovereign credit rating to Uzbekistan.

The long-term ratings in foreign and national currency were assigned at the level “BB-”, the short-term ratings in foreign and national currency - “B”. The forecast is “Stable”.

“The forecast reflects our expectations that next year Uzbekistan’s net assets will remain strong, although they will decline slightly due to the projected deficit of the current account and government borrowings,” the report said.

The agency notes that they could raise the country’s ranking if the effectiveness of Uzbekistan’s monetary policy improves. For example, if dollarization of the economy decreases. Diversification of the income base or composition of exports may also have a positive impact on the rating in the future.

As for the decline, it can be expected if fiscal or external positions worsen. For example, if the budget deficit exceeds the baseline scenario, or if the current account deficit becomes higher than expected, and increases the need for debt.

The agency believes that the government will continue the current course of reforms.

However, S&P calls the banking system of Uzbekistan as one of the weak points - it is 84% owned by the state, which limits competition and the commercial nature of the sector. The government intends to fix this, but concrete results are yet to be made.

Earlier, it was reported that the international rating agency Fitch Ratings placed Uzbekistan in a long-term “BB-“ rating in local and foreign currencies.