Economy / China
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Corporate Debt Risk To Sovereign Ratings
April 2008 | Sovereign Risk RatingSorry, you must be a subscriber to view this article in full. If you are a subscriber please login.
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Our Sovereign Risk Ratings for Asia are largely unchanged from our January update, with some countries even showing improvement, amid more stable political environments and stronger currencies - indeed, the latter has made the cost of repaying external debt cheaper in local currency terms. The main risks to our sovereign ratings are reduced trade surpluses, as a weakening US economy opts to import fewer items from Asia, and rising inflation, which will force central banks to adopt a tight monetary policy. However, this quarter, we have chosen to analyse private external debt, which, while not incorporated into our sovereign ratings, nonetheless poses considerable indirect risks to countries' creditworthiness.