International agency Standard and Poor's confirmed BiH's credit rating

The international agency Standard and Poor's confirmed the credit rating of Bosnia and Herzegovina, B with stable outlooks.

The rating is based on the fact that the fiscal deficit is sustainable, despite the delay in the continuation of the Extended Fund Facility (EFF) program approved last year by the International Monetary Fund (IMF), and that the country's economy has moderate growth, which positively affects fiscal revenues, according to Standard and Poor's analysts in their explanation.

Stable outlooks reflect the opinion of the agency's analysts that the government will be able to cover the financing of budget needs on the domestic capital market and that in the next 12 months it will focus on meeting the conditions of the Extended Fund Facility (EFF arrangement) with the IMF. External debt is assessed as relatively low and under favorable lending conditions. 

BiH's credit rating could be lowered if the foreseen IMF tranche is not received in the coming period, which would lead to the need for external financing and liquidity pressure at the level of both entities in the next 12 months.

Standard and Poor's agency has determined that BiH is committed to preserving the independence of the Central Bank of Bosnia and Herzegovina and the stability of monetary policy based on the principles of a currency board, which implies full coverage of the monetary base by the central bank's foreign exchange reserves.