Fitch Ratings, the international rating agency, on October 30 upgraded Romania's long-term foreign and local currency ratings to 'BB-' (BB Minus) and 'BB' from 'B+' and 'BB-' (BB minus) respectively. The Short-term foreign currency rating has been affirmed at 'B'. The Long-term rating Outlook is Stable.

"Romania's creditworthiness has improved markedly over the last two years. It is currently enjoying its strongest macroeconomic performance since transition began and, underpinned by official financial support and improved bond market access, the National Bank's international reserves have increased to record levels. Thus, liquidity has improved and the public sector has recently become a net external creditor," reads a press release issued by Fitch Ratings on October 30.

Certainly incentives such as the target date of 2007 for EU membership, which was recently given a major boost by the European Commission when it endorsed the target, and the chance of an invitation to join NATO are likely to provide momentum over the coming year. Nonetheless, many of the necessary measures are difficult to implement since the short-term impact will be painful for a population that has already seen living standards fall sharply over the last decade.

(NewsBase 01.xi.02)