S&P Global Ratings affirmed New Zealand's long-term foreign and local currency sovereign credit ratings at AA and AA+, respectively, with a stable outlook.

The rating agency said Jan. 20 that it also affirmed New Zealand's short-term foreign and local currency credit ratings at A-1+. S&P maintained its transfer and convertibility risk assessment on New Zealand at AAA.

The affirmation reflects New Zealand's monetary and fiscal policy flexibility, economic resilience and public policy stability, S&P said. It added that these strengths are moderated by the country's very high external imbalances, high household and agriculture sector debt, dependence on commodity income and risks to its financial system stability.

New Zealand's stable outlook balances the stabilization in the government's debt profile and the risks associated with the country's high external debt. The outlook is based on S&P's expectation that the country's financial system will remain sound and its government finances robust.

S&P could downgrade New Zealand's ratings if its fiscal, external or banking metrics turn out weaker than expected. Conversely, the rating agency could upgrade the country's ratings if stronger export performance and higher public savings markedly reduce external debt and the government's debt burden.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.