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Country Risk Service Turkmenistan 2nd Quarter Updater

  • ID: 4522293
  • Country Profile
  • April 2021
  • Region: Turkmenistan
  • 19 Pages
  • The Economist Intelligence Unit
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.
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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
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