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Moody's Reviews Lithuania's Progress and Intends to Upgrade Lithuania's Ratings

Date

2003 08 19

Rating
0

Vilnius, 19 August, 2003. Lithuania's progress has been reviewed by global credit rating services. After upgrade in Lithuania's foreign currency credit ratings from positive prospects up to stable prospects in March 2003,  Moody's Investors Service, a global credit rating, research and risk analysis firm, today reported the realistic possibilities to upgrade the foreign-and domestic-currency ratings.

"There are all the objective prerequisites for upgrade in ratings, as Lithuania has really made an impressive bound forward in macro-economic, administration of public finances and other areas, thus being named as "a rising star among the countries of the region", affirmed Mrs. Lina Adakauskienė, Undersecretary of the Ministry of Finance of the Republic of Lithuania.

Moody's intentions to upgrade the ratings were basically caused by the country's fiscal position, rapid economic reforms.

The firm noted a marked improvement in financial management, steady reforms in the tax system, administration of municipal finances, health reforms. "An enhanced business environment is contributing to stronger-than-expected macroeconomic performance", stated Moody‘s press release.

Moody's said, that the review of ratings will focus on the sustainability of current positive fiscal and macroeconomic trends, particularly with respect to the country's ability to withstand the external shocks to which it still remains vulnerable.

Lithuania's planned entry into the European Union in 2004 is also of great significance in carrying out reviews of ratings. EU integration is expected to accelerate the country's economic and financial expansion.

Moody's upgraded current long-term foreign currency ratings on Lithuania is Baa1 (positive prospects), current domestic- currency ratings - also Baa1.

In end-July, Standard&Poor‘s Ratings Services, following the review of Lithuania's rapid economic growth and recognition of the remarkable success of reforms pursued, also raised the long-term foreign currency prospects on the Republic of Lithuania from the past stable into positive. Even earlier, in February 2003, the Services raised the long-term foreign currency ratings on the Republic of Lithuania from 'BBB' to 'BBB+' and the short-term foreign currency ratings from 'A-3' to 'A-2', the long-term local currency ratings from 'BBB+' to 'A-'.

In December 2002 Fitch Ratings raised the long-term foreign currency ratings on the Republic of Lithuania to 'BBB' (stable prospects).