Romanian Pres: S&P Downgrade Decision Not Plausible As Public Debt Is Low

"We are not making the evaluations, Standard & Poor’s is. But I want to state that Romania’s public debt stands at EUR11 billion, which means the country has a very low debt degree," Basescu said in a press conference.

 

On Monday, Standard & Poor’s Ratings Services lowered its long- and short-term foreign currency sovereign credit ratings on Romania to ‘BB+/B’ from ‘BBB-/A-3’, and its local currency long-term rating to ‘BBB-‘ from ‘BBB’, citing risks to the country’s economy due to high private-sector leverage and dependency on an uncertain external financing channel.

 

Basescu said that in the evaluation, S&P did not take into account the country’s public debt, but the private debt.

 

He added that the most of the foreign debt is private debt, which is not state-guaranteed, and has no impact over the public budget.

 

According to the central bank’s data, Romania’s total foreign debt stood at EUR47.46 billion at end-August, of which the public debt accounted for EUR10.65 billion.

Basescu also mentioned that Romania’s forex reserve stands at EUR27 billion.