NZ’s Credit Rating Unchanged
August 7th, 2008
Rating agency Standard & Poor’s has affirmed its AA+ foreign currency credit rating on NZ. The agency says the rating reflects NZ’s strong fiscal flexibility, political stability and flexible and resilient economy. It adds NZ’s current account deficits and high external debt leave the economy vulnerable to external shocks. “While NZ’s high net external indebtedness leaves the banking system very reliant on non-resident funding it remains profitable, adequately capitalised, and demonstrates good asset quality by international standards.” An upgrade to AAA would require a significant and sustained improvement in NZ’s external position over many years.
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Duncan Cotterill