Moody’s is highly rated for Saudi government issuances denominated in riyals
Minister of Finance: The evaluation confirms the resilience of the economy and its ability to meet the challenges of global conditions
Saturday – 23 Safar 1442 AH – 10 October 2020 AD Issue No. [
Saudi government debt issuances denominated in riyals for the highest credit rating (Middle East)
Riyadh: «Middle East»
A recent credit rating has strengthened the quality of Saudi Arabia’s finances, the level of government issuances, and confidence in the local currency, highlighting the credibility of Saudi Arabia’s assertions on the strength of its financial position and its ability to face the current economic impacts at a time when the world is enveloped by the repercussions of the circumstances of the “emerging corona virus”.
And the International Credit Rating Agency (Moody’s) announced yesterday, the credit rating of the Kingdom’s government issuances, represented by the Ministry of Finance, which is denominated in Saudi riyals on the local scale at the degree of (Aaa.sa).
The Minister of Finance, Minister of Economy and Planning, Acting Head of the Financial Sector Development Program, Muhammad Al-Jadaan, confirmed yesterday that the classification reflects the strength of the Kingdom’s economy, its flexibility and its ability to face global economic challenges, as well as the effectiveness of structural reforms and financial and economic policies aimed at promoting economic growth, its sustainability and its diversification towards achieving development. Comprehensive economic and social.
According to a statement issued by the Ministry of Finance yesterday, the positive estimates from the credit rating agencies confirm the great confidence in the Saudi economy, the strength of the Kingdom’s financial position and its ability to continue growth and face challenges, especially in light of the crises and exceptional circumstances that the world is currently witnessing.
Al-Jadaan indicated that the Kingdom’s government is continuing to achieve the goals of the Kingdom’s Vision 2030 towards empowering the financial sector in the Kingdom to be among the largest financial centers in the world by 2030 despite the challenges facing the global economy in the face of the repercussions of the Coronavirus pandemic.
For his part, the CEO of the National Debt Management Center, Fahad Al-Saif, stated about the classification of Saudi issuances denominated in riyals at (Aaa.sa) that it is the highest degree of investment grade that reflects the depth of local debt markets by providing a risk-free yield curve.
According to Al-Saif, the recent evaluation confirms the high creditworthiness of local issuances with the growing demand of investors and private sector companies in the Kingdom for them as a safe investment, especially in light of the financial and economic conditions that the world is currently witnessing due to the Corona pandemic (Covid-19), which has paid a lot of International financing institutions of a developmental nature to make Saudi Arabia the headquarters of their activities. Al-Saif explained that the credit rating of local issuances is a guiding reference for potential exporters from the public and private sectors, which contributes to enhancing transparency within the local debt markets, and the classification on the local scale contributes to achieving the objectives of the financial sector development program in deepening the market and developing local debt markets.
Al-Saif pointed out that the new classification issued by the international agency (Moody’s) reflects the objectives of the Ministry of Finance based on the efforts of the National Center for Debt Management to diversify debt instruments issuances in the local and international markets and to prove the strength and durability of the Saudi economy through historical coverage of the issuances.
It is expected, according to Al-Seef, that the credit rating on the local scale will support the appetite of international investors to the local debt markets.
It is noteworthy that the credit rating reports for issuances on a local scale are opinions about the creditworthiness of issuers from the public and private sectors, including financial obligations related to other exporters within a country.
The credit rating of domestic issuances deals with the relative risks within a country (relative to the rating of government issuances), while the credit rating of international issuances is based on a cross-country comparison.
It is known that the credit rating agency, Moody’s, announced last September that the Saudi government had succeeded over the past three years in developing a domestic sukuk market “from scratch” to become “deep”, and that it was “working increasingly well.” This allowed it to benefit from the increasing domestic and international demand for fixed income assets that are Sharia-compliant. ”
The Saudi economy
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