Standard & Poor’s Ratings Services has downgraded Romania’s rating from “positive” to “stable”, amidst the political tensions this year, but re-confirmed the ratings for credits in hard currency and home currency respectively. Hard currency ratings were confirmed at “BBB minus”, long-term, and “A3”, short-term, and those for home currency, at “BBB” and “A3”, namely. According to S&P analyst Remy Salters, this downgrading reflects the lack, for a long time now, of a clear political orientation at a time when challenges remain significant both with regards to structural reforms, which allow Romania to reap advantages from its joining the European Union, and in controlling foreign deficits generated by high domestic consumption demands.
On the other hand, Fitch agency rating considers that a government reshuffling is not a reason for lowering the “BBB” rating, with stable prospects, which Romania was given in relation to long-term foreign currency debts, however there is a risk of interrupting the reform process. Instead, the minority status of the new government and the reliance on foreign support increase the risk of blocking the required structural and institutional reforms, as well as the risk of augmenting politically-influenced budget spending, informs a Fitch press release published yesterday. Also, Moody’s Investor Service might review the national rating for Romania from “stable” to “negative” only if reforms are significantly delayed or if the budget deficit registers an important increase.