Fitch Affirms Lithuania's Sovereign Ratings

(RTTNews) - Fitch Ratings retained sovereign ratings of Lithuania on Friday as the economy is expected to meet all the criteria to join the Eurozone in January 2015.

The European Central Bank and European Commission are expected to issue favorable convergence reports in mid-2014.

The rating agency forecast the fiscal deficit of the nation to be close to 3 percent of gross domestic product in 2013, in line with euro-accession requirements. Moreover, external deleveraging has proceeded steadily and is forecast to continue.

It noted that adoption of the euro would reduce foreign currency credit risks in the domestic banking system, eliminate the exchange-rate risks posed by foreign-currency government debt, and allow greater fiscal financing flexibility afforded by the euro's reserve currency status.

The senior unsecured foreign and local currency bonds were affirmed at 'BBB+' and 'A-' respectively, with 'stable' outlook. Fitch said Lithuania's strong governance and effective policy-making support are among its key strengths.

The 'stable' outlook reflects the assessment that upside and downside risks to the rating are currently well balanced.