Another rating agency, Fitch Ratings, is set to be appointed for rating the country’s economy for two years (2014-2015), alongside the existing two agencies—the Standard & Poor’s and Moody’s, a senior official at the finance ministry said. The ministry of finance on Wednesday gave its go-ahead to Bangladesh Bank for appointing the three rating agencies for two years. The appointment formalities would be completed by the end of this month, the official added.
The New York-based Fitch, now engaged with 30 countries for conducting their sovereign ratings, has agreed to do the job free of cost for Bangladesh, while negotiations are going on with the existing two agencies over fixing their service costs, sources said.
‘We have approved the appointments of three rating agencies and asked BB to complete the next course of action,’ a senior finance official told New Age on Thursday.
‘Aiming to get more exposure to global audiences after Bangladesh came out of the ‘grey list’ of financial action task force, the to-be appointed new agency along with the existing ones will help achieve our goal to shine Bangladesh abroad,’ he added.
The contracts of the two rating agencies with Bangladesh expired on December 31 last year.
Standard & Poor’s and Moody’s were first appointed in 2010 for credit ratings in Bangladesh. Moody’s reassessed Bangladesh’s rating unchanged at Ba3 for 2012, for the third consecutive year.
Bangladesh’s rating is higher than those of Sri Lanka (B1) and Pakistan (Caa1), but one notch below that of India.
Generally, foreign companies willing to invest in a particular country consult the reports of credit rating agencies before they decide to invest.
In case of foreign borrowing by the Bangladeshi private sector, positive assessments from rating agencies help them get low-cost foreign loans, a BB official said.
The private sector companies took foreign loans worth US$ 1.48 billion in the last 2012-13 fiscal year compared with US$ 1 billion a year ago, according to Bangladesh Bank data.
Officials at BB said their negotiations with existing rating agencies are almost final. The cost to be borne by the government for the services Standard & Poor’s will provide for two years is likely to be nearly US$ 62,500, while US$ 65,000 for Moody’s.
A meeting held at BB on Wednesday, presided over by its executive director Ahsan Ullah, decided to appoint the three rating agencies, approved by the finance ministry, within the current month, an official, who attended the meeting said.
-With New Age input
