Local Currency Rating
From Open Risk Manual
Definition
A Local Currency Rating is a Credit Rating where the creditworthiness of an obligor is assessed in terms of ability to repay obligations denominated in the prevailing local currency
Usage
A local currency rating is relevant for both Sovereign Risk and Corporate Credit Rating of entities domiciled and/or operating in regions with significant Country Risk
Rating agencies methodologies typically involve a Local Currency Ceiling which gives the highest rating grade available to locally-domiciled debt issuer. This rating cap aims to express the likelihood of Country Risk events (excluding FX related risks)
