Standard and Poor's Confirms BiH Credit Rating

International agency Standard and Poor's has confirmed Bosnia and Herzegovina's credit rating at B with a stable outlook, announced the Central Bank of BiH.

In the explanation, analysts from this agency state that they expect Bosnia and Herzegovina to continue receiving international financial support, which will support government finances and reduce pressures on the balance of payments. This primarily refers to a new program with the International Monetary Fund (IMF), which is expected to be concluded in the coming months. This program would also enable additional financing from the European Union and the World Bank.

The stable outlook is based on expectations that the possible continuation of international lending, along with conditions for securing loans, will strengthen policy regarding the reform agenda.

Alongside negotiations with the IMF, the authorities of both BiH entities have adopted laws to initiate activities within the reform agenda adopted last year, including labor laws, corporate tax reforms, and laws on improving banking supervision. However, despite the possible arrangement with the IMF, analysts from this agency expect implementation risks. Progress in structural reforms is a key condition for improving the business environment and stimulating economic growth. As in previous years, disbursements under the new arrangement with the IMF will be crucial in financing BiH's current account deficit for 2016.

Analysts from the agency Standard and Poor's state in the report that Bosnia and Herzegovina is committed to preserving the independence of the Central Bank of Bosnia and Herzegovina and the currency board, which requires adequate coverage of the monetary base with foreign exchange reserves, the CBBiH statement said.