Rea­son­able re­sponse

ChinAfrica - - Cover Story -

Al­though BRICS may be ir­ri­tated by the down­grades that may po­ten­tially cause mar­ket up­heaval, they should look at the rat­ing agen­cies with a cool head rather than re­spond with over­whelm­ing crit­i­cism.

Ad­mit­tedly, as well-es­tab­lished or­ga­ni­za­tions, the agen­cies have de­vel­oped a com­plete and ef­fec­tive as­sess­ment model and ap­proach. Their pro­fes­sion­al­ism de­serves full recog­ni­tion. It is also de­bat­able that the agen­cies de­lib­er­ately lower the sovereignty credit rat­ings of emerg­ing na­tions as de­vel­oped na­tions have also had their rat­ings low­ered. Be­sides, the plum­met­ing oil price, do­mes­tic in­sta­bil­ity, in­ter­na­tional sanc­tions and shrink­ing for­eign in­vest­ment all con­trib­ute to poor eco­nomic per­for­mances of Brazil and Rus­sia, thus lead­ing to the down­grade. China, South Africa and In­dia face fi­nan­cial risks of a dif­fer­ent na­ture. A re­duc­tion in credit rat­ing more im­por­tantly re­flects in­ter­na­tional in­vestors’ wide­spread con­cerns. Also, the rat­ing cal­cu­la­tion is a dy­namic process with ups and downs.

Of course, there are prob­lems with the agen­cies’

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