The Economic Content of Indicators of Developing Country Creditworthiness

February 1, 1996

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The Economic Content of Indicators of Developing Country Creditworthiness, (USA: International Monetary Fund, 1996) accessed November 8, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper analyzes the economic determinants of developing country creditworthiness indicators for over 60 developing countries for the period from 1980 to 1993. Our results indicate that economic fundamentals--the ratio of non-gold foreign exchange reserves to imports, the ratio of the current account balance to GDP, growth, and inflation explain a large amount of the variation in the credit ratings. All developing country ratings were adversely affected by an increase in international interest rates independently of the domestic economic fundamentals. A country’s regional location and the structure of its exports (such as whether it is primarily an exporter of fuel products or manufactured products) were also important.

Subject: Balance of payments, Credit ratings, Current account balance, Exports, External debt, Inflation, International trade, Money, Prices

Keywords: Africa, Asia and Pacific, Country risk, Credit ratings, Current account balance, Debt, EIU index, EIU rating, EM rating, Euromoney, Europe, Exports, GDP ratio, Growth rate, II rating, Inflation, Institutional investor, Institutional investor data, Middle East, Rating, Rating agency, Ratings criteria, Terms of trade, WP

Publication Details

Pages:

46
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1996/009
Stock No:

WPIEA0091996
ISBN:

9781451927283
ISSN:

1018-5941

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