March 2011 Country Credit Survey: Mideast Unrest, Western Debt Cloud Outlook

March 15, 2011

Sovereign creditworthiness improved slightly in the past six months, driven mainly by a rebound in ratings for the U.S. and much of Europe, but countries in the Middle East and North Africa are seeing their ratings plummet because of the unrest spawned by the political uprisings in Tunisia and Egypt.

The average credit rating of countries in the Middle East and North Africa remain unchanged in Institutional Investor’s semiannual Country Credit survey, at 55.6 on a scale of zero to 100, down a statistically insignificant 0.1 point from six months ago.

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Interest Rates

The Great Decoupling: Central Banks Fall Out of Step on Inflation Policy

Switzerland blinked first. In March, the Swiss National Bank kick-started a rate cutting cycle, becoming the first central bank overseeing the world’s 10 most heavily traded currencies to lower rates for the first time since November 2020. It joined counterparts in Latin America and other emerging markets that have been speeding up rate cuts as the threat of inflation has eased. In February, the Bank of China cut its five-year loan prime rate – the largest cut of its kind on record – to come to the aid of real estate developers struggling with debts. But it was the Swiss cut that got analysts excited.

Hazel Sheffield, April 23, 2024