The UAE achieves advanced positions in the credit rating of international institutions

A report by the Center for “interregional strategic analysis” reported that the UAE has achieved advanced positions in the credit rating of prestigious international institutions, such as “Fitch” and “Moody’s”, with a stable outlook, pointing out that although there are about 150 accredited credit rating agencies operating in about 32 countries, the credit rating market is controlled by three major agencies: Moody’s, Standard & Poor’s and Fitch.
In detail, the negative ratings issued by credit rating agencies, especially in the wake of global economic crises, raise fundamental questions about the role of rating agencies in showing the real picture of the economies of countries and investment entities.

In a recent report, the” interregional Center for strategic analyses ” in Abu Dhabi said that credit rating agencies have emerged more than 50 years ago to form a very important mechanism in assessing the level of risks involved in investing, or lending money to a particular company or entity, including governments, which is an independent assessment of the creditworthiness of businesses or government entities in general.
“Interregional” stressed that the global rating agencies have been playing an indispensable role for investors and lenders who always need the green light to allow them to make the appropriate decision to buy certain bonds or stay away from them because they carry significant financial risks, and the agencies often provide important information to governments to make important economic decisions.
While a high credit rating indicates that, according to the rating agency, it is likely that the bond issuer will be able to repay its debts to investors without difficulties, a weak credit rating indicates the likelihood that bond issuers will face difficulties in making their payments, and possibly completely default. He explained that although there are about 150 accredited credit rating agencies operating in about 32 countries, the credit rating market is dominated by three main agencies: Moody’s, Standard & Poor’s and Fitch. According to the” official portal of the UAE government”, the country has achieved advanced positions in the credit ratings of prestigious international institutions such as Fitch and Moody’s, with a stable outlook. The portal added that the rating reflects the creditworthiness of the federal government institutions and their outstanding ability to formulate the necessary policies to continue growth. In July 2023, the UAE received a sovereign credit rating of “AA -“, (very strong) with a stable outlook, from Fitch global agency. This rating reflects a moderate level of the consolidated public debt of the state, a strong position of net foreign assets and a high GDP per capita.