Moody’s changes outlook on Romania’s Baa3 rating to stable from negative

Newsroom 29/04/2014 | 10:22

According to the press released on Friday, Moody’s Investors Service has changed the outlook on Romania’s Baa3 government bond rating to stable from negative. Concurrently, Moody’s has affirmed Romania’s Baa3/P-3 government bond ratings.

The key drivers of today’s outlook change are as follows:

(1) Moody’s expectations that the improvement in Romania’s macro-economic indicators in 2013 will be sustained.

(2) The decline in risks to Romania’s growth and external financing outlook owing to a recovery in the euro area, with which Romania has strong links.

The key drivers of Moody’s affirmation of Romania’s government bond ratings are:

(1) The likely support to GDP growth provided by an increase in exports and EU fund absorption, though growth in domestic demand and credit may remain below pre-crisis levels in the near term.

(2) The reduction in the fiscal deficit and moderate government debt levels, which alleviate some of the risks posed by the government’s reliance on external and foreign-currency debt to meet its financing needs.

(3) Romania’s access to multilateral financing, which buffers the risks to external debt-repayment capacity that international market volatility can generate.

Romania’s local-currency bond and bank deposit ceilings and long-term foreign-currency ceiling all remain at A3, and the long-term foreign-currency bank deposit ceiling remains Baa3. The short-term foreign-currency debt and deposit ceilings are P-2 and P-3 respectively.

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