The central bank is at the final stage to hire two international credit rating agencies - Standard & Poor's and Moody's Investors Service to conduct a credit rating for Bangladesh.
A five-member technical committee, comprised of officials from Bangladesh Bank (BB), Ministry of Commerce and the Institute of Chartered Accountants of Bangladesh, sits today to recommend these two firms to the BB governor for their appointment. The central bank chief will finalise the appointment of the two among the three invited to do the credit rating.
Another firm, Japan Credit Rating Agency did not respond.
“The technical evaluation committee has decided to recommend Standard & Poor's and Moody after scrutinizing their proposals,” a senior BB official said yesterday.
The move for Bangladesh's first-ever credit rating, initiated by the central bank in May to ensure a better credit rating for the country, will help attract foreign investment and mobilize resources from the capital market as well, experts believe.
Such rating was earlier arbitrarily practiced by donors and individual enterprises.
“We need a credit rating for the country so that any organizations or countries cannot do such rating solely on Bangladesh based on their own perceptions,” a BB senior official remarked.
In this context, the BB governor's observation is: “Some ratings unnecessarily branded Bangladesh as a high risk country.”
On appointment of the recommended firms,
the central bank will issue work orders to them after completing negotiations with them on prices and time duration in a month.
There foreign banks -- Citibank NA, Hongkong and Shanghai Banking Corporation (HSBC) and Standard Chartered Bank will offer advisory services to the BB in the total process of completing the task.
Standard & Poor's and Moody's Investors Service will be allowed to do the credit rating job independently, if appointed. However, the reports to be submitted by these firms will be assessed by the central bank for a better rating of the country.
Although credit rating for business organizations is common globally, country-wise credit rating is a bit new. Besides developed countries, some Middle East and many African countries have their own country credit ratings.
Credit rating generally reflects a country's overall economic situation, but socio-political issues also get high focus.
>> Source: The Daily Star, October 29, 2008
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