INTERNATIONAL FINANCIAL MANAGEMENT

COUNTRY RISK ASSESSMENT

CONTENTS

• INTRODUCTION

• COUNTRY RISK ASSESSMENT

• COUNTRY POLICY

Country risk

Risk assessment is made up of two main

components –

• Assessment of political risk (country risk

assessment)

• Assessment of commercial risk

Country risk assessment

• Country risk assessment is mainly about assessing

a country's ability to transfer currency for foreign

payments.

• This ability is determined by a number of different

circumstances which can be grouped as political,

economic and financial factors.

Country risk

Country risk

Economic Risk

Political Risk

Financial Risk

Market Risk

Country risk assessment sums up to a country policy

• The country policy is regularly updated, and is

based on EKN's own risk assessment and the

minimum premium levels for political risk

defined in the OECD cooperation.

• The country risk categories are arranged on a

scale of 0 to 7 – the lower figure, the better

the country's creditworthiness.

• This ability is described using the

expressions 'normal risk assessment',

'restrictive risk assessment' and 'normally

off cover'.

• In EKN website, normal risk assessment is

marked in green, restrictive risk assessment

in yellow and normally off cover in red.

EKN divides these into the following group:

• sovereign risk

• other public buyers

• banks

• corporates

For example, EKN may have yellow (i.e., restrictive)

for sovereign risk, but green (i.e., normal) for other

types of risk.

THANK YOUPRESENTED BY:M INDRAJA 15331E0075