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Fitch: Romania comes back to investment grade

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2011-07-05 08:52

Today, Fitch rating agency upgraded Romania’s long term foreign currency sovereign rating to “BBB-“ (investment grade) from “BB+” previously (non-investment grade). The rating outlook was set to “stable”, informs Raiffeisen Research.rnrn”The upgrade reflects Romania’s progress in recovering from the effects of the financial crisis, evident in a return of GDP growth, a strong export performance, narrowing in the current account deficit and reduction in its budget deficit,” Fitch said.rnrnWhen changing the rating, the rating agency took into account positive developments in the economy like: the resumption of economic growth, the adjustment of domestic demand and current account deficit to more sustainable levels, the ongoing fiscal consolidation process (the government is on track to meet its deficit target this year), successful access of government to international capital markets, and the policy anchor provided by the new precautionary IMF/EU programme.rnrnThe news had a positive impact on the leu which gained around 0.6% against the euro shortly following the announcement. Given the depreciation in the last month and the recent decrease in uncertainty on the external market, we think that further gains are also possible for the leu in the coming period.

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