Romania's C-bank Says S&P’s Rating Downgrade Unexpected, Unmotivated – Media

“It’ pretty hard for me to understand why Romania was the first step in the downgrades of the countries in the region. I think Romania had positive aspects which were not incorporated in the S&P’s analysis,” the broadcaster quoted BNR’s vice governor Cristian Popa as saying.

Global rating agency Standard & Poor's on Monday lowered its long-term and short-term foreign currency sovereign credit ratings on Romania to 'BB+/B' from 'BBB-/A-3', and its local currency long-term rating to 'BBB-' from 'BBB', setting a negative outlook. It said that the downgrade reflects the mounting risks to Romania's real economy.

S&P’s downgrade decision was unexpected because the Romanian economy in general is no more vulnerable than the economies in other comparable countries, Popa said.

The positive aspects of the Romanian economy not considered by S&P were the country's low public debt, which is estimated to be equivalent to 12% of the projected gross domestic product for this year, and its foreign exchange reserves which cover 92.4% of the country’s debt, Popa added.

Popa also said he expected lending growth in Romania to slow down to 15% in 2009 from the 50.5% rise registered so far this year.

($ = 0.7835 euro)