LV: OECD improves Latvia's risk rating by one notch.

By bne IntelliNews January 30, 2012
Organisation for Economic Cooperation and Development (OECD) improved the risk classification by one notch to Category 4. OECD's risk classification scale ranks countries from 0 (lowest rating) to 7, taking into account economic, financial and political conditions in the country. OECD commented that Latvia's efforts on stabilising its financial situation were welcomed by the international community. Last week spokesperson of the Bank of Latvia Martins Gravitis announced that the central bank anticipates Latvia's sovereign rating upgrade after major rating agencies will visit the country in the coming spring. This came as a comment to Japanese rating agency's Rating and Investment Information decision to upgrade Latvia's rating by one notch to BBB-/Stable. Gravitis noted that Latvia is one of few European countries that could rely on a stable or even positive rating action in current economic environment. However, economic analysts surveyed by BNS following CB's announcement were sceptical on the prospects on rating upgrade given the deteriorating external environment. Fitch Ratings lowered the outlook on Latvia's sovereign ratings from Positive to Stable in December 2011. The agency attributed the downgrade to rapid deterioration of the external environment and the increased instability in the financial sector. Fitch believed that the crisis in the eurozone will have a negative effect on Latvia's exports. Currently Fitch's long-term foreign currency rating for Latvia stands at BBB-, Moodys foreign and local currency rating for Latvia at Baa3 (outlook Positive), while S&Ps credit rating at BB+ (Positive outlook).
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