Hungary’s plan to allow borrowers to repay foreign-currency mortgages below market rates may hurt lending, growth and public finances, according to Standard and Poor’s, which rates the country’s debt a step above junk.
Standard & Poor’s predicts that Spain, Portugal and Ireland will all have current-account surpluses this year as they reform their economies after the sovereign debt crisis pushed them to seek bailouts.
Turkey’s local-currency credit rating was raised to investment-grade by Standard & Poors, which cited “continuing improvements” in the country’s financial industry and the expansion of local debt markets.
The Swiss National Bank said a Standard & Poor’s report that it spent about 80 billion euros ($104 billion) this year through July buying debt from the so- called core euro-area countries is “unfounded.”
Estonia’s “substantial” gross external debt level limits the country’s fiscal flexibility “considerably,” Standard & Poor’s credit analyst Frank Gill said in an e-mailed reply to questions today. A formal invitation to the Baltic country in July to join the single currency bloc would itself not trigger a credit rating upgrade, he said, adding S&P decides debt rankings based on a country’s stand-alone creditworthiness.