Fitch Upgrades Cyprus And Malta Currency Ratings To Positive
by Lorys Charalambous, Tax-News.com, Cyprus
05 November 2003

Fitch ratings, the international ratings agency, this week revised upwards the outlook on the long term foreign currency ratings for seven of the European Union accession nations, including Cyprus and Malta, from stable to positive.

According to Fitch, the countries affected are listed as Cyprus ('A+'), Latvia ('BBB+'), Lithuania ('BBB'), Malta ('A'), Poland ('BBB+'), Slovakia ('BBB') and Slovenia ('A+').

Hungary's 'A-' (A minus) long-term foreign currency rating remains on Negative Outlook due to concerns over near-term macroeconomic trends and prospects. Its sovereign credit ratings will be the subject of a full review in the near future.

Fitch expects the incoming members of the EU to have sovereign credit ratings two to three notches above their current level when they eventually adopt the euro, given that full membership of the euro area reduces the risks to sovereign creditworthiness emanating from balance of payments imbalances and external shocks. Fitch also considers that where Exchange Rate Mechanism (ERM II) participation indicates a credible commitment to meet the Maastricht criteria and join the euro area within a few years, it can be a rating strength.

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