Nepal Maintains 'BB-minus' Country Rating by Fitch
Summary
Nepal has retained its ‘BB-minus’ sovereign credit rating from Fitch for the third straight review, with stable external reserves, manageable debt levels and moderate monetary stability supporting the result. Analysts say governance weaknesses, FATF grey-list status and climate-related liabilities continue to hold back an upgrade.
Key Points
- Fitch kept Nepal’s long-term foreign and local currency issuer ratings at ‘BB-minus’ and the short-term rating at ‘B’.
- The report cites strong remittance inflows, comfortable foreign exchange reserves and manageable debt as key reasons for the stable rating.
- Governance weaknesses, weak ESG performance, FATF grey-list status and climate-related reconstruction costs are limiting an upgrade to ‘BB’.
- Analysts say the stable rating should help investor confidence and could improve if Nepal reforms laws and exits the FATF grey list.
