European rating agency Fitch plans to raise Romania's ratings linked to its long-term foreign and domestic currency-denominated debt, after it announced on Monday it had revised its rating outlook from "stable" to "positive". At present, ratings stand at the level of "BB" and "BB+". The short-term debt rating has been confirmed at its current level of "B". The main hindrance preventing Romania from seeing its ratings increase is the rapid rise of lending, which has added to the deepening of the budget deficit, estimated to climb to 6.1% of GDP at the end of this year. "The situation must be permanently monitored, given that the rapid increase of lending may give rise to troubles for the banking sector, and by overheating the economy may hinder efforts to reduce inflation to a one-digit rate, amid higher foreign financing needs," Fitch analysts consider. Fitch thinks that the signing of a new two-year agreement with the IMF should lend economic policies a certain discipline, increasing foreign markets' confidence that no major slips will throw Romania's economic reform programme off course. Such an event would affect the country's EU integration ambitions. ZF
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