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Fitch Recognised Lithuania's Borrowing Risk to Become Lower

Date

2003 11 04

Rating
0

Vilnius, 4 November, 2003. The Fitch - international ratings agency, which recognised that the government borrowing risk becomes lower, today reported the upgrade in Lithuania's foreign currency credit ratings from stable up to positive prospects. This year Moody‘s and Standard & Poor‘s Ratings agencies have also delivered the same ratings' prospects on the Republic of Lithuania.

"The upgraded ratings' prospects demonstrate that economic and financial policies pursued by the government are ranked positive and the government borrowing risk tends to become lower", affirmed Mr. Lukas Tursa, Head of the Market Operations Division of the Public Debt Management Department of the Ministry of Finance. According to Mr. Tursa, "such recognition may serve as an indicative signal to markets that in the short run the government rating may also be upgraded, thus resulting in decrease of the government borrowing costs".

Fitch Agency experts, who are on a visit in Lithuania at present, are performing the progress review in the area of macro-economics, administration of public finances, fiscal and monetary policy pursued by the government, key macro-economic indicators and their forecasts, government plans for the next year. The upgrade in Lithuania's ratings by Fitch will depend upon the experts' conclusions delivered after the visit.  

Alongside with Lithuania six more candidate countries: Latvia, Poland, Cyprus, Malta, Slovenia and Slovakia have also been delivered the same Fitch ratings .  

According to the Agency's reports, after joining the eurozone and following the moderation of the borrowing risk, Lithuania's and other present candidate countries' government borrowing ratings will be upgraded by 2-3 points. In Fitch opinion, this presumably could happen at the earliest in 2007.

In December 2002 Fitch Ratings raised the long-term foreign currency ratings on the Republic of Lithuania from 'BBB-' (positive prospects) to 'BBB' (stable prospects). Simultaneously, the Agency raised the long-term local currency ratings from 'BBB+' to 'A-'.

In end-July, Standard&Poor‘s Ratings Services also raised the long-term foreign currency prospects on the Republic of Lithuania from the past stable into positive. The long-term foreign currency ratings on the Republic of Lithuania raised by the Services match BBB+, the long-term local currency ratings match A-. In August this year Moody‘s reported the realistic possibilities for another upgrade in the aforementioned ratings.

In March 2003 Moody‘s raised the long-term foreign currency ratings on the Republic of Lithuania to Baa1 (positive prospects), the long-term local currency ratings also matched Baa1.