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Country Risk Service Moldova 1st Quarter

  • ID: 3613018
  • Country Profile
  • February 2021
  • Region: Moldova
  • 27 Pages
  • The Economist Intelligence Unit
Moldova's sovereign debt rating remains at B in The Economist Intelligence Unit's February 2021 assessment, while the score has improved by 3 points. This reflects improvements in terms of financing and liquidity, with foreign-exchange reserves increasing by one-fifth over the last six months. Deteriorating metrics in terms of growth, exchange rate misalignment and asset prices are mitigating factors limiting further improvement in this round.

The currency risk rating is unchanged, at B, but the score has improved to 54, reflecting positive developments in foreign-exchange reserve coverage ratios, bank credit and currency volatility. Partly mitigating these improving metrics are growing risks related to currency misalignment, given the strong appreciation of the real effective trade-weighted exchange rate.

Moldova's rating for banking sector risk is unchanged, at B. A slight improvement in the score reflects recent stabilisation of bank credit growth and the return of positive real interest rates. Improvements over recent years in the health of the banking sector support the rating, but sizeable non-performing loans and the poor political and economic environment limit any upgrades.
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Country Risk Service Moldova 1st 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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