Moody's: large stock of external assets helps Azerbaijan to adapt to low oil prices
According to Moody's Investors Service's report, Azerbaijan's high level of external assets provides a large buffer to mitigate the adverse effect from the decline in oil prices on the country's economy.
Analysts of the agency said that the oil price drop has already affected the payment balance. However, Azerbaijan's large stock of foreign assets, worth roughly $42 billion as of the end of the Q2 2015, gives it time to adjust to lower oil prices.
Moody's Assistant Vice President-Analyst, Sebastian Becker, said that the foreign assets enable Azerbaijan to let fiscal deficits widen during periods of lower oil prices, weaker growth and reduced fiscal revenues.
"However, Azerbaijan remains strongly reliant on the oil sector, and thus remains vulnerable to a potential further decline in oil prices," Trend cited the report as saying.