Fitch Upgrades Latvia Rating after Eurozone Greenlight
Global agency Fitch on Tuesday upgraded Latvia's credit rating by a notch to BBB+, just hours after the Baltic nation was green-lighted to become the eurozone's 18th member.
"The upgrade follows the announcement of ECOFIN's decision today to invite Latvia to join the eurozone on 1 January 2014," Fitch said in a statement, adding that the country's outlook was stable.
The decision by the ECOFIN council -- made up of finance ministers of the EU's 28 member states -- was widely expected. Fitch said in May that approval would likely trigger an upgrade.
"Euro adoption will enhance economic policy coherence and credibility compared with the current exchange rate peg to the euro," the agency said Tuesday.
Rival agency Standard & Poor's meanwhile upgraded Latvia by a notch to BBB+ last month after the EU executive voted to approve the 2004 EU entrant's eurozone bid.
"The rating agencies have reacted with lightning speed to the positive news about Latvia," Latvian Prime Minister Valdis Dombrovskis tweeted on Tuesday.
Since coming to power in 2009, Dombrovskis has made euro accession his government's number one priority, even as over half of the population is opposed to the euro, according to the latest opinion polls.
Despite the eurozone's current troubles, Dombrovskis said that membership would bring with it benefits such as lower interest rates, lower currency conversion costs and increased foreign investment.
Latvia was hit hardest among EU members during the global economic crisis, with output contracting by nearly a quarter in 2008-2009.
But its economy has since bounced back with a vengeance: Latvia posted the EU's best growth figures in both 2011 and 2012, with its gross domestic product expanding by more than five percent each year.
Source: Agence France Presse
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