News

Lithuania’s objective to adopt the euro from 2015 has won a word of appreciation from the international capital markets.

The international rating agency Standard & Poor’s on Friday upgraded Lithuania’s credit rating perspective from stable to positive, specifying, as one of the reasons for this action, the increasing probability for this country to become a Member State of the euro area from 2015.

The agency noted that the rational use of the EU funds during the crisis has helped Lithuania create a fiscal cushion and balance out payments. Furthermore, timely and effective strategies applied by the supervisory institutions in managing the bankruptcy of two national banks, Snoras and Ūkio bankas, prevented their financial problems from spilling over into the public sector and larger economy.

According to Standard & Poor’s, the Lithuanian economy will continue to grow and inflation will remain low, thus increasing the probability that the country will comply with the euro adoption criteria and become the nineteenth Member State of the euro area in 2015.

The Bank of Lithuania considers that upgrading of the credit rating perspective from stable to positive may herald possible advancement of the country’s overall credit rating.  Currently Standard & Poor’s has assigned Lithuania with the long-term credit rating BBB.

Upgraded ratings will allow the country to borrow at an even lower cost in the international markets.

On their part, lower interest rates would allow saving up to EUR1.1 billion in interest expenses in the medium term (2015–2022). The general population and the business community would enjoy the bulk of the benefits (net savings worth EUR 670 million), the remaining portion (EUR 460 million) being saved by the state budget due to decreased debt management costs, predicts the Bank of Lithuania.

Source: The Lithuania Tribune

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