Portugal's credit rating might plunge

Source: Press TV
http://www.presstv.ir/detail/156588.html


Moody's Investors Service says it is reconsidering Portugal's credit worthiness, warning that it might downgrade the country's credit rating by as much as two notches.

Moody's is reviewing government bond ratings amid concerns over Portugal's ability to meet its financing needs and its economic situation following Lisbon's austerity program.

Moody's also cited Portuguese banks' dependence on the European Central Bank as what could account for a downgrade, noting that the banks' financing needs from Portugal's government could “adversely affect” its debt metrics.

"The likely deterioration in debt affordability over the medium term and ongoing concerns about the economy's ability to withstand fiscal consolidation and private sector deleveraging mean its outlook may no longer be consistent with an A1 rating," CNBC quoted Moody's Anthony Thomas as saying on Tuesday.

The world's top credit ratings agency has also expressed concern about the overall economic strength of the embattled eurozone.

The New York-based agency is also reviewing debt ratings in Spain and Greece for possible downgrades after it lowered Ireland's rating by a sweeping five notches last week.

Investors worry that downgrades could impair the eurozone's borrowing power, which would consequently force the euro lower and undermine the sovereignty of the monetary union.