On Oct. 27, 2008, Standard&Poor's Ratings Services lowered its long- and short-term foreign currency sovereign credit ratings on Romania to 'BB+/B' from 'BBB-/A-3', and its local currency long-term rating to 'BBB-' from 'BBB'. The 'A-3' short-term local currency rating was affirmed. At the same time, the Transfer&Convertibility (T&C) assessment was lowered to 'BBB+' from 'A-'. The outlook is negative, indicating that the balance of risks is on the downside. The downgrade reflects the mounting risks to Romania's real economy due to high and rising private sector leverage and the related dependency on an increasingly uncertain external financing channel. Policy makers have not addressed these growing economic challenges, as the focus has shifted to the upcoming general
