sovereign credit rating

A sovereign credit rating is an evaluation of a country's ability and willingness to repay its debts, issued by credit rating agencies. It helps investors gauge the risk of lending money to that country, similar to how a credit score works for individuals. A high rating indicates low risk and easier access to borrowing at favorable rates, while a low rating suggests higher risk and potentially more expensive borrowing costs. These ratings influence a country’s borrowing costs, economic reputation, and financial stability perceptions in global markets.