Fitch Ratings has confirmed Kazakhstan’s e credit rating at BBB + with a “stable” outlook, reflecting its approval of the steps President Nazarbayev’s government has taken to absorb several  recent blows to its economic performance.”Kazakhstan has sustained a severe shock to its terms of trade, precipitated by a sharp fall in the oil price,” the agency  commented in a statement issued last week.  “The magnitude of this shock has been intensified by the collapse of the rouble , the prospect of a deep recession in Russia and a slowdown in China –  two of Kazakhstan’s largest trading partners –  and an ensuing wave of devaluations throughout the CIS, which has left the KZT looking noticeably overvalued relative to trading partners’ currencies.
“Like all major oil producers and exporters, the Kazakh authorities have been faced with the challenge of judging whether the current oil price shock is temporary or permanent. On balance, they have chosen to err on the side of caution, revising down the oil price assumption underlying the 2015 budget to $50/bbl from $90/bbl and cutting expenditure by 10%. This stance is consistent with a lengthening track record of prudent fiscal management, characterised by recurrent fiscal surpluses and a build-up of foreign-currency fiscal reserves in the National Fund (NFRK).
“In Fitch’s view, Kazakhstan’s strong sovereign balance sheet – sovereign net foreign assets (SNFA) exceed 40% of GDP and gross general government debt (GGGD) is less than 15% of GDP – affords it considerable room for manoeuvre, without unduly compromising sovereign creditworthiness.”