S&P affirms Kazakhstan

Standard & Poor's said it affirmed its long-term BBB foreign and BBB+ local currency sovereign credit ratings on the Republic of Kazakhstan.

At the same time, the short-term A-3 foreign and A-2 local currency sovereign credit ratings were affirmed, the agency said, noting that the affirmation is a result of on-balance sheet assets continuing to outpace government debt, though off-balance sheet contingent liabilities are high and rising because of the rapid expansion of bank credit.

The outlook is stable.

At the same time, reflecting the full ownership and support of the government, the BBB/A-3 ratings on Development Bank of Kazakhstan were also affirmed, the agency said, adding that the affirmation reflects the growing net asset position of the government and strong economic expansion that offset the contingent liability risk stemming from high domestic credit growth and the burgeoning external borrowing of the banks.

The ratings on the Republic of Kazakhstan reflect the government's strong balance sheet and prudent fiscal policy stance, moderate external liquidity and good economic growth prospects, buoyed by favorable export markets for Kazakh products, S&P added.

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