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Country Risk Service Moldova 2nd Quarter

  • ID: 2527752
  • Country Profile
  • May 2021
  • Region: Moldova
  • 26 Pages
  • The Economist Intelligence Unit
Moldova's sovereign debt rating has been downgraded to CCC in The Economist Intelligence Unit's May 2021 assessment, while the score has worsened by 5 points. The public debt/GDP ratio now stands above 40%. There are also increasing concerns about Moldova's access to financing. The US$558m loan agreed with the IMF in July 2020 has yet to be approved by the IMF board, and the sovereign has increasingly resorted to borrowing at shorter maturities.

The currency risk rating is unchanged, at B, but the score has worsened by 2 points. Rising political instability has not only contributed to increasing exchange-rate volatility in the past three months, but has also culminated in a snap parliamentary election set for July 11th. Periods immediately before and after elections are associated with increasing financial market risk.

Moldova's rating for banking sector risk is unchanged, at B and the score has worsened by 2 points, reflecting primarily deteriorating financing and liquidity metrics. Foremost of these is the increasingly restricted access to financing related to the delay in securing further IMF lending. Declining coverage of short-term debt by foreign exchange reserves also weighs on the score.
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Country Risk Service Moldova 2nd Quarter

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Sovereign risk
Current assessment
Positive factors
Negative factors
Rating outlook

Currency risk
Current assessment
Positive factors
Negative factors
Rating outlook
Foreign-exchange regime

Banking sector risk
Current assessment
Positive factors
Negative factors
Rating outlook

Generic risks
Political risk assessment
Economic structure risk assessment

Country risk
Overall country risk

Central scenario for 2021-25: Political stability

Central scenario for 2021-25: Election watch

Central scenario for 2021-25: International relations

Central scenario for 2021-25: Policy trends

Central scenario for 2021-25: Fiscal policy

Central scenario for 2021-25: Monetary policy

Central scenario for 2021-25: Economic growth

Central scenario for 2021-25: Inflation

Central scenario for 2021-25: Exchange rates

Central scenario for 2021-25: External sector

Central scenario for 2021-25: External financing requirement

Central scenario for 2021-25: External debt

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

International liquidity

Foreign payment and liquidity indicators

External trade

External financing requirement

External debt stock

External debt service
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