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’