S&P drops Romania

Standard & Poor's said it 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.

The A-3 short-term local currency rating was affirmed, the agency said.

At the same time, the transfer & convertibility assessment was lowered to BBB+ from A-, S&P noted, adding that the outlook is negative, indicating that the balance of risks is on the downside.

According to the agency, the downgrade reflects the mounting risks to Romania's real economy due to high and rising private sector leverage and the related dependency on an increasingly uncertain external financing channel.

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