Romania’s credit rating should be improved because the country has narrowed its budget deficit and is economically stable, Economy Minister Varujan Vosganian said.
With the central bank likely to leave borrowing costs unchanged, an upgrade would give lenders in the eastern European nation better access to funding, Vosganian told a conference today in Bucharest.
“The rating agencies should upgrade Romania’s sovereign rating,” Vosganian said. “This move would help improve the funding of the banking system during these times of crisis.”
Romania embarked on one of the European Union’s toughest austerity plans in 2010 by cutting state wages and increasing the value-added tax. The government, which received a bailout from the International Monetary Fund and the European Union, trimmed the budget deficit to 2.5 percent of economic output last year from 7.2 percent in 2009.
Romania is rated at the lowest investment grade at Fitch Ratings and Moody’s Investors Service. It’s been at one level below investment grade at Standard & Poor’s since 2008.
Credit-default swaps, which measure the cost of insuring Romanian debt against non-payment for five years, traded at 241 points today after reaching 190 points on Jan. 28, which was the lowest in about five years.