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Sovereign ratings to stay under pressure next year - Moody's

Published 05/11/2015, 02:30 am
Updated 05/11/2015, 02:40 am
© Reuters.  Sovereign ratings to stay under pressure next year - Moody's

LONDON, Nov 4 (Reuters) - Factors such as limp global growth, weak commodity prices and the potential impact of a rising U.S. interest rate will keep sovereign ratings under pressure next year, Moody's said on Wednesday.

The rating agency said in its 2016 Global Outlook that a wide scale emerging market crisis was unlikely, but that "negative scenarios are more likely to materialise than positive ones" with more countries' ratings on negative outlook now than this time last year.

"The most exposed large emerging markets (to a Fed hike triggering credit pressures) are those such as Turkey ... Brazil, Russia and to some extent South Africa," Moody's said, citing their high levels of external debt.

Zambia and Mongolia were more at risk from the downturn in metals markets than Australia and Chile, though both Australia and Chile and Korea, Singapore and parts of sub-Saharan Africa and were all being adversely affected by China's slowdown.

Low oil prices were having the biggest impact on Bahrain and Oman though they would erode the finances of all producers.

Moody's added though that fiscal and external buffers would allow Latin American sovereigns to weather the storm better, with growth set to recover after 2016.

Brazil was an exception. Its recovery will rely more on domestic reform than global growth, Moody's said.

(For full report go to https://www.moodys.com/)

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