The sovereign risk score improved by 1 point to 61 in The Economist Intelligence Unit's January assessment, and the rating is on the cusp of the B and CCC bands. The score improvement was driven by increasing net foreign-exchange reserves, as well as by a return to surplus of the current-account balance and the external financing requirement.
The currency risk rating remained within the CCC band and the score was unchanged at 67. The positive trend in the current-account balance over the past 12 months and the increase in foreign-exchange reserves over the past six months support the rating. We maintain our view that the Central Bank of Turkmenistan will be able to manage pressures on the manat and maintain its peg to the US dollar. High inflation and the exchange-rate misalignment weigh heavily on the overall currency risk score.
The banking sector risk score has deteriorated by 2 points to 76, and the rating is at CC. The banking sector is poorly regulated and domestic debt markets are underdeveloped. Government-directed lending constrains financial soundness indicators and the estimated high ratio of non-performing loans also weighs on the rating.
The currency risk rating remained within the CCC band and the score was unchanged at 67. The positive trend in the current-account balance over the past 12 months and the increase in foreign-exchange reserves over the past six months support the rating. We maintain our view that the Central Bank of Turkmenistan will be able to manage pressures on the manat and maintain its peg to the US dollar. High inflation and the exchange-rate misalignment weigh heavily on the overall currency risk score.
The banking sector risk score has deteriorated by 2 points to 76, and the rating is at CC. The banking sector is poorly regulated and domestic debt markets are underdeveloped. Government-directed lending constrains financial soundness indicators and the estimated high ratio of non-performing loans also weighs on the rating.
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Country Risk Service Turkmenistan 2nd Quarter Updater
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
Central scenario for 2021-22: Political stability
Central scenario for 2021-22: Election watch
Central scenario for 2021-22: International relations
Accuracy of official data
Central scenario for 2021-22: Policy trends
Central scenario for 2021-22: Fiscal policy
Central scenario for 2021-22: Monetary policy
Central scenario for 2021-22: Economic growth
Central scenario for 2021-22: Inflation
Central scenario for 2021-22: Exchange rates
Central scenario for 2021-22: External sector
Key risk indicators
Ratings summary
International assumptions summary
Economic structure
Public finances
Exchange rates, interest rates and prices
Current account
International liquidity
Foreign payment and liquidity indicators
External trade
External financing requirement
External debt stock
External debt service
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
Central scenario for 2021-22: Political stability
Central scenario for 2021-22: Election watch
Central scenario for 2021-22: International relations
Accuracy of official data
Central scenario for 2021-22: Policy trends
Central scenario for 2021-22: Fiscal policy
Central scenario for 2021-22: Monetary policy
Central scenario for 2021-22: Economic growth
Central scenario for 2021-22: Inflation
Central scenario for 2021-22: Exchange rates
Central scenario for 2021-22: External sector
Key risk indicators
Ratings summary
International assumptions summary
Economic structure
Public finances
Exchange rates, interest rates and prices
Current account
International liquidity
Foreign payment and liquidity indicators
External trade
External financing requirement
External debt stock
External debt service
Note: Product cover images may vary from those shown