The Economic Content of Indicators of Developing Country Creditworthiness

International Monetary Fund

No 1996/009, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; institutional investor; debt; rating; Euromoney; II rating; EIU rating; country risk; GDP ratio; rating agency; institutional investor data; growth rate; EM rating; EIU index; terms of trade; ratings criteria; Credit ratings; Inflation; Exports; Current account balance; Asia and Pacific; Europe; Africa; Middle East (search for similar items in EconPapers)
Pages: 46
Date: 1996-02-01
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Citations: View citations in EconPapers (78)

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