Mubasher: The U.S. Federal Reserve's decision to increase interest rates can keep Emerging Markets (EM) sovereign ratings under pressure in 2016, according to a recent report.
The Fed raised the target range of the federal funds rate for the first time since 2006, by 25 basis points to 0.25%-0.50%.
Fitch expected four further 25 bp rises in the rate through 2016.
EM sovereign ratings will be also affected by significant knock-on effects if international capital flows are redirected toward U.S. assets.
The rating organisation expected that there will a possible pressure on sovereigns that rely on portfolio flows to finance current account deficits.
Fitch kept its US real GDP growth forecasts at 2.5% in 2016 and 2.3% in 2017.
The strong dollar will have an impact on the US exports and manufacturing competitiveness, which will lead to uneven growth, with consumers faring substantially better than producers.
The Fed's tightening policy against other major central banks such as the European Central Bank (ECB) and Bank of Japan supports growth in other advanced economies and counter deflationary pressures in the eurozone and Japan.
