Fitch Ratings agency downgraded on Friday the current long term credit rating of Croatia in the domestic currency from BB+ to a BB, with negative outlook, levelling it with the country’s rating in foreign currency, explained by recent changes in the evaluation criteria
Fitch is due to publish a detailed report and overview of Croatia’s rating, while only publishing a commentary on Friday, considering the recent changes in evaluation criteria, Tportal.hr wrote on July 23, 2016.
An additional explanation of Fitch’s move is due July 29, while this commentary only states the downgrade of the long term rating in domestic currency to BB is based on recent changes in evaluation criteria, meaning the credit profile of Croatia does not support a rating in domestic currency higher than the one in foreign currency.
At the same time Fitch notes that neither one of the two key factors, according to new criteria, support the rating discrepancy. The first factor are strong foundations of public finances compared to outer financial foundations, while the other is previous financial treatment of creditors in the domestic currency compared to creditors in foreign currency.
Additionally, Fitch wrote the short term ratings of Croatia in both currencies are left unchanged at B. The criteria changes were applied by Fitch to many other country ratings on Friday.
