BRICS Countries Want New Credit Rating Agency
The BRICS countries, Brazil, Russia, India, China and South Africa at the Summit in Goa on Sunday 16 October 2016 agreed to set up a rating agency for emerging markets. The new agency will be aimed at challenging western dominance in the world of credit rating agencies. According to international media, the BRICS nations complain that existing credit agencies are biased against them, making borrowing more expensive.
Fitch Ratings Agency recently revised Namibia’s economic outlook from stable to negative, mainly because of Namibia’s high deficit, the projections of national debt growing above and beyond the accepted threshold, as well as the high likelihood of Government not being able to narrow the deficit in the coming financial years.
“If we are going to start using debt to finance basic operations than it becomes extremely inefficient,” said Relf Lumley Portfolio Manager at Capricorn Asset Management (CAM). Lumley said the minister of Finance Honourable Calle Schlettwein will soon give an update on the Medium Term Budget, saying it is one of the most important budget updates that the country had in a long time because of the slight shortage of funds within our nation. Lumley added that it is important that we could see an update on where we are standing with what’s been issued and how much debt the nation has picked up combined with its growth figures.
In Spotlight News this week we sat down with Relf Lumley Portfolio Manager at Capricorn Asset Management (CAM) on the decision made by BRICS countries to establish a credit rating agency, whether it would ease borrowing, Government debt and the Medium Term Budget update to be announced soon.
– Are developing countries borrowing too much?
– Would a new credit rating agency change things?
– Are credit rating agencies biased?
-Article and interview by Maggie Forcelledo